Within ΣL (Sigma L - Longer cycles and Ghost cycles)


#1

I wish to adress these open thoughts and hopefully start a brainstorm. Bounce ideas, theories, information and gather a bigger and greater awareness of what lies within Sigma L.

While Longer duration cycles are on the table and have been for quite a while in Hursts work, today we know that there is more then just Long or bigger hidden cycles. I am coming from a behavioral analysis and string theory angle here while being anchored to Hursts work. I’ve started noticing a pattern emerge from the offsets that occur anytime with (any selected) cycles of (any selected) financial instrument (although it goes beyond financial instruments of course). I’m sure i’m not the only one noticing these things. These offsets that we tether to a natural dynamic average wavelength SHOULD be predicted if a larger data series is in hands.

I mentioned string theory because the deeper (further in dimensions) we go the more we depart from well defined linear/poly/well defined structure and dive into the quantum realm and information itself(beyond well defined). I would like to start from somewhere and since I found quite the elevated community here I thought I reach out with this topic. I mean I’m obsessed with cycles but here … just natural with cycles.


#2

Here are two screenshots of Sentient analysis of the Dow Jones Industrial Average, both starting just prior to the year 1928 high, both considering peaks and troughs, no repins, and both showing the composite line. The composite line of the first chart includes all cycles, including Sigma L, the second includes all cycles EXCEPT Sigma L. Quite a difference, at least in the intermediate term. I remember David Hickson suggesting one of his webinars that the Sigma L should be removed from consideration within the composite line. These charts are presented as food for thought, not as predictions or suggestions.


#3

Please specify what cycles were considered Sigma L and were removed in the second chart. Thanks.


#4

Both Charts show exactly what I’m underlining here. Lets assume both charts here have correct phasing analysis done and by all means checking the composite and other tools will confirm that 90%. Now lets call the deviations or these offsets as artifacts of our analysis.

These artifacts (unknown pressures of longer periods or absolute fundamental interactions that come up “unexpectedly” in our analysis) should be extracted in a parallel timeframe to the original dataseries. A new phasing analysis will be performed with an objective and clear mind on the artifact dataseries.

Now we have a clear cyclical picture of our financial instrument and also of whatever is (from time to time) causing it to breath differently (hiccup). I am expecting these all (dataseries) to compactify the same way in the future aswell presenting us more accuracy in the forecasting. Markets are interconnected (Principle of commonality with the one of Variation) almost as if we have one complex data series from the start – one that is split into a infinite (should be finite yet enormous number imo) of cycles beating.


#5

All Sentient Trader figurable cycles were considered on both charts, from 5-day thru 18-year and every cycle in between, using the Hurst nominal model. Only the one single Sigma L cycle within Sentient Trader was unchecked for the second chart.


#6

Thanks for the explanation. Further clarying question. Is “the one single Sigma L cycle” the 17.8 year cycle? I am not a subscriber to Sentinal Trader and I am not familiar with the term “Sigma L cycle”. Thanks again.


#7

No. It is not the 18-year cycle. It is something else, which maybe someone else in the group would be happy to explain.


#8

Sigma L was and has been used in all kinds of mathematical equations. Maybe not like Hursts Sigma (L) but definitely in a similar fashion. In these pictures/case Sentient Trader is focusing on understanding what is missing and rounding it up into a SUM of ALL UNKNOWN CYCLES that are missing from your analysis. Now Hurst took this from a Longer wavelength approach and called it Sigma L. Sentient Trader from what I understand takes much more into calculus. I hope I shed some light over the topic and Sigma L.

I find it fascinating and I can think about these things all day - have no one to talk to about these. I expect that here at least we can elevate perspectives on Hursts work.


#9

Hi @Srid, yes indeed I hope that you will find you can discuss these concepts here. They are very fascinating. From my perspective I can explain what Sentient Trader does when it is calculating Sigma L. In fact there are two separate approaches to Sigma L in ST. the first is a fairly generic and non-mathematical approach, where it considers the time displacement in the cycles, and calculates what is called a “Sigma L component” for each cycle. And so for instance if the 40 day cycle has time translation to the right, then clearly there is a strongly bullish underlying trend, but if the sum of the longer cycles does not add up to such a strongly bullish underlying trend, then the Sigma L component for that cycle will be positive to account for the difference. The idea here is that something is causing the bullish distortion in the cycle, which is not accounted for in the longer cycles in the analysis, and therefore it is attributed to “Sigma L”.
In the case of the Composite Model Line, a different approach is taken to calculating Sigma L. What the software does is it calculates the amplitude of each wave of each cycle, and constructs the CML model by simply adding them up. Then it compares the result to the actual price action, and builds a smoothed line which is Sigma L. Some very interesting things emerged when I started working on this. For instance there are shorter frequency fluctuations in the Sigma L line. As others have pointed out, this shouldn’t happen, because Sigma L should be the combination of all longer cycles and therefore it should not have shorter frequency fluctuations. For some time I played around with isolating and eliminating these shorter frequencies, but I found it more effective to leave them in, which is why the Sigma L component of the CML is not strictly speaking “Sigma L”. It is in fact a combination of all the longer cycles (Sigma L) and also all unknown influences on price. For a while I played around with separating these elements and calling the second component “Unknown L”. That all became very complicated for the user, and not really of much use, and so I combined them again. In any case the separating of them was fairly artificial, and didn’t work very well.
The fascinating part of all of this, as you mention in your post is that it is possible to extract the Sigma L line from the CML, and to perform a cyclic analysis on that line.
As a matter of interest, I have a theory as to why there are shorter term fluctuations, which has to do with the fact that we expect the cycles that we analyze to be synchronized in their troughs or their peaks. Where these shorter term fluctuations arise I believe is when there is a shift between the synchronisation of troughs and peaks, and therefore our cyclic model using an analysis which takes a fixed approach to the synchronisation of the turns results in periods of time where the shorter term cycles emerge in the Sigma L line.


#10

“As a matter of interest, I have a theory as to why there are shorter term fluctuations, which has to do with the fact that we expect the cycles that we analyze to be synchronized in their troughs or their peaks. Where these shorter term fluctuations arise I believe is when there is a shift between the synchronization of troughs and peaks, and therefore our cyclic model using an analysis which takes a fixed approach to the synchronization of the turns results in periods of time where the shorter term cycles emerge in the Sigma L line”

Hi David

Would I be correct in assuming that you observe these “shorter term fluctuations in terms of troughs & peaks” in your sigma line more when doing so on a NM (nominal model) chart then you do on a ICM (initial cyclical model) chart?

Cheers


#11

Hi @david.hickson, it is always such a pleasure having you around here and thank you - thank you for continuing Hursts work and inspiring us all. I believe most of the answers were clarified here and you shed quite the light on the Sigma L found in ST.

This is what fascinates me! Sigma L influences everything at such a deep level. It made me reangle my perspective so many times and wonder if the small ripples that happen in the “Unknown L” of Sigma L are actually the ones that trigger or compose(be) the Longer Cycles of Sigma L. They both should be the same thing!? One cannot exist without the other. This might be the reason it is best to leave them together - now this also opens up so many questions on how to explore this “Unknown L” in order to understand its future state. I expect them to be extremely dynamic (these ripples) yet bound to a grand scale grid. Just as electricity will only flow from point A to point B - if “it knows” there is a point B, to begin with. An absolute state of time.

I can converge on your theory David, it makes sense. I’m still bound to a synchronistic perspective on all peaks and troughs and in parallel mapping these artifacts under “Unknown L” (ghost cycles, ripples - whatever they are) - but I am gonna try to reangle my view on this more.

Much appreciated. Hurst Cycles community is definitely elevating and also the place to come if you see cycles all day and in anything.