US Steel - Beginners Analysis for Review


#1

Please find an initial Hurst analysis (from a beginner) on US Steel (ticker: X). Would appreciate it if anyone could review and provide any feedback. Also sharing with the group because it could be a good one to make a few bucks on relatively soon. If the analysis is correct, that is.

First pic is the longer-term view as I see it. 54M down to the 20Wk is projected to bottom around the weeks of 6/2-6/13.

I’ll post the daily intermediate-term view next.

Best,

LevyBrain


#2

Second pic is down to the daily intermediate-term view as I see it. The shorter 10 and 5 week seem to be projecting a little further out to the 6/26 time frame.

Not pictured, but I’m currently reviewing and waiting for the first 2.5 Wk cycle to bottom. Then I will get hyper focused on the second 2.5 Wk cycle bottom.

That’s at least the plan. Would love to hear from others on their thoughts of this initial analysis or where they see X going in the near-term future.

Best,

LevyBrain


#3

Sorry. Your chart looks interesting so I draw this. Cycle seems extended but the pattern still exists. Very hard to go lower at 12 and 10. Future price must be higher than 45.


#4

Hi Levy,
With that phasing I would expect a full retest of the lows and likely new lows. Where does that come from? Your nested or synchronous low for the 54 month is still ahead given your phasing. So one might rethink that 54 month low cycle here or consider that X is leading the commodity complex lower. Wonder what that says for things like copper and base metals.

It appears the stock trades much like the underlying commodity, as I note the important highs in 2008, 2011, and 2014.


#5

Steel is, naturally, very similar to Copper. An 18 month cycle is imminent, probably one more 40 day cycle to go with the last 80 day 18th April ish. I would be expecting to see support at the 18 month FLD, assuming the low back in Jan 2016 was a 4.5 yr nominal low.


#6

Hi David,
That is the phasing needed to be bullish. I hesitate on relying on Hurst’s nominal model here as default. I don’t think this phasing will go wrong. But if “X” acts more like the underlying commodity, cycle periods may drag out here. The stock is 8 months up and 8 months down.

For a long time now I use different models for crude oil, gold/silver, coffee, and more recently metals like copper. I think copper for example has a 40ish month and 20 month cycle to it. Not convinced about it. But if so I wonder if iron ore would be the same.


#7

Time will tell John. It is tempting to use different nominal models. I tend to stick to the original nominal model and give it some flexibility. I also don’t always assume the price low is the cycle low (it usually is), that can tempt you into switching to a different nominal model…

I also pay very close attention to interactions with the FLD to tell me my phasing is pretty good. I like the interactions with the 18 month FLD here, especially around May/April 2016 time and within the last few weeks.

That all said, this is the first time I have ever laid eyes on steel. Perhaps I should more often, looks pretty good from a cyclical perspective.

Dave


#8


#9

Hi Alain,
Nice chart as well. To be honest I lean towards the longer term phasing you show here. Your larger envelopes leaning toward an important top being made here. And any trade long here in the coming weeks is very likely countertrend until a clear buy setup. Definitely a stock to watch.
By the way, that phasing and the cycle periods shown on the lower right of the Sentient chart are what I would expect for a commodity. How did run this with ST? :slightly_smiling_face:


#10

Hi John, this is included in the last version of ST. I got an email about it. Previously I had the beta version which followed my december presentation

Hereunder are the Envelopes Parameters (Envelopes Settings)

Let’s say that US STEEL fluctuates within the "Fractal of Price " 0-100

the Octave then = 100 / 8 = 12,50 plus or minus the Central Moving Average 256 , so practically you divide the interval - here 100 - by 4 . You get 25 as you can see i have entered in the Envelope settings

then you divide the 256 parameter by 2 to get the 128 parameter = 25 / 2 = 12,5
then you divide the 128 parameter by 2 to get the 32 parameter = 12,5 / 2 = 6,25

as soon you have determined that the 256 parameter is to your “taste” , meaning enough inclusive of the price movement , you got it (the “Octave”) and it is very stable with the time

if you have a sudden impulse up or down you just have to multiply or divide the parameters by 2

in average the process can take between 1 to 2 minutes ! which is nothing on a long term chart

the Octave calculation can eventualy been “refined” (adjusted if necessary) but the system I use is very “robust”


#11

John - in above US STEEL case I used the Initial Cyclic Model from ST (with no commonality)

Remember that Envelopes are the FIRST analysis tool that Hurst gives us. Envelopes were Hurst first tool to determine average cycle duration (Time)

combination with “Gann” octave gives us a very good and precise estimation of price movements - from lower boundary to the upper boundary

moreover you can quickly and visualy estimate the (relative) underlying trend - price distance (measured move) from one Low to another Low less the relative Envelope depth


#12

Same system on intraday (5 Days / 5 mn) with TradingView


#13

Joe - Would be interested to learn what you would consider a clear buy setup? Higher lows? FLD crosses? VTL crosses? Thanks so much for your thoughts.


#14

Taking a step back and looking at the sector… X has been an underperformer.

Here is a view of the Weekly

SLX ETF

The nominal 20 and 40 week cycles are bottoming. The 20 week FLD has met the target.

I reviewed the SLX holdings and most are holding above their May lows. MT is making new lows.

Here is the top holding Daily RIO

Along with TX and PKX, these look the best coming off the May low. The 5 week low is approaching. Price may find support here at the 5 week FLD. I would classify this as a category E and consider using a break of the 2.5 wk FLD for a long entry. A high above the May high would create a right translated 10 week cycle.

X did not bottom with RIO and made its recent low 5/18.

Bryan


#15

Just an update on RIO.

RIO did not print a higher high coming out of the most recent low and has dropped below it.

Using the 2.5 wk FLD as the entry, price did test the most recent high where partial profits were taken. The stop was moved from the low to the 2.5 wk FLD which has been exceeded to the downside.

I’ve changed some of the parameters and have extended the length of the cycles a bit. It pushes back the 20 week low into March. This is more in line with continued expected weakness in copper and the overall market.

I used ray tomes’ CATS software to make the cycle adjustment.

Bryan


#16

The Steel Sector has done well since the June bottom. MT tested the 2.5 wk FLD in a B interaction then reversed higher and is now in C. Entry used a break of the 1.25 wk FLD coming out of the 2.5 wk low. I decided to sell a bit here at horizontal resistance.

Bryan


#17

Nice work! May I ask why you selected MT to be the stock you selected to play this sector? Thanks!


#18

There were others to choose from such as PKX, RIO, or SLX. MT made a new low in June and has been strong since. While new lows would usually be a sign of weakness, once a reversal occurred it may have trapped some shorts and may bring more fuel for the rally. Others have been building higher lows. Others look congested AKS, X, NUE.


#19

RIO Daily

Moving into a 2.5 / 5 wk low here.


#20

STLD Daily

Nice high base, cup/handle IBD style. Should see a break to the upside.