Topix Banks Sector - 21 February 2023

You will come across specific terms in these notes (FLD, VTL, and so on). Rather than explain them each time, you will find definitions here: guidance notes for Hurst cycles terminology  Note: we have abbreviated the text in response to your feedback (since our subscriber base has expanded dramatically, more non-Hurst specialists have come on and feedback has favored the abbreviated text).

Topix Banks Sector -  40 week cycle peak zone - Rotate Down.  Looking for  a deep retracement, but wait for confirmation (e.g. a hard near term break and failed retest up).

1. The rally since March 2020 (the Covid low) has price channelled well across three 18 month cycles which constitute the overarching 54 month cycle.
2. The current 18 month cycle is due to bottom in early 2024, which because it is the third in the set means that it is also the 54 month cycle trough.  The status of the 54 month therefore is hard down and a tailwind.
3. In a broad bear regime we expect to see drawn out sell offs and late troughs and fast cover/momentum rallies and early peaks.
4. In this weekly chart we are focusing on big cycles and the next downside magnet is the 40 week cycle trough due in May.  We look to be in the 40 week peak zone now at the very top of the channel: this is highly precarious.
5. Note well also: if the 40 week cycle has peaked then probably so also has the 18 month cycle, and if so then it is very left translated (early) which is bearish indeed.