AUSSIE CYCLE TRADER - Monthly Newsletter for MARCH 2023
March 2023 is a month of change. This is good timing for us as our markets are due for a Primary Cycle low and the start of a new cycle. When will the low occur and what is the longer term outlook?
March 2023 is the big month of change for the current year… geocosmically speaking. Two major events are unfolding. Saturn, the planet of discipline, responsibility and limitation, moved into Pisces on 7th March, where it will remain for the next 2.5 years. Meanwhile Pluto, the planet of transformation, power and intensity is moving into Aquarius where it will remain for the next 20 or so years.
These events are not likely to have any immediate impact on the markets but can speak to broader changes in psychology and culture. For example, the way society sees government, spirituality and technology among other things changes, particularly with new hidden truths being revealed, and new technology such as AI. Some very interesting videos to explain these matters can be seen here and here.
We also have the 21st of March Ingress of the Sun into Aries, an event that trader W.D Gann was said to claim as the most significant ‘seasonal date’ of the year (the March equinox date), and which ushers in the typically bullish periods for Aussie markets through April and May. This date has been used as a marker for significant highs and lows in the past (ie. The Covid Low). Speaking of Covid, it’s the 3 year anniversary, and aren’t we glad that’s behind us.
But what lays ahead for the markets? In this newsletter, we’ll look at the impending new primary cycles in the AUDUSD and ASX200, and how we should be trading them.
I hope you enjoy this month’s newsletter.
Jonathan R.
PS. These newsletters constantly reference various cycle lengths and characteristics. Cycle theory is assumed knowledge, and to a lesser degree, geocosmics. For more background info on cycles and geocosmics, see this link.
Disclaimer:
All information provided is based on analysis of the markets using publicly available information and data. It is provided for your own review and study with no consideration of your personal circumstances. Trading markets always involves risk. No guarantees are made. You are solely responsible for any transactions you initiate in the market.
Review of the AUDUSD currency pair
Last month’s newsletter showed the AUDUSD is typically bearish as the Sun moves out of Capricorn and through Pisces. This held true as the market declined off the 2 February high of $0.7157 and fell to a low of $0.6563 last Friday 10th of March. At the time of writing, the market is responding to a lot of fear after the collapse of Silicon Valley Bank in the USA.
Readers of this newsletter will not have been surprised by the bearishness and hopefully profited with some short trades!
Let’s now review our charts and see if the low is in.
AUDUSD Long Term Cycles
The AUD/USD has a 17-year cycle, with 2-3 sub-cycles of 6.8 years (+/- 10 months)
For the 2-phase variation - cycles have tended to expand out to 7.5 years or longer.
For the 3-phase variation - cycles have tended to be 6-7 years, with a contracted 3rd phase of 3-4 yrs.
Despite the bearish action there is not a lot of change to our long term outlook. We are in month 36, and in a ‘neutral’ position as it relates to the 6.8-year cycle. The shorter Moving Average is still above the longer one, and price below both. The MA’s are now at an inflexion point. If price stays below both of them, and the shorter falls below the longer, the market can be downgraded from neutral to ‘bearish’.
We should also be conscious that we are approaching the orb period for the 46-month cycle in June 2023. The lowest point of the current cycle is the commencement in March 2020 and until this is taken the out, the current cycle can be considered technically bullish, although we do have mixed signals such as left translation. The end of longer-term cycles usually results in a significant drop in price. However, we still have multiple shorter term cycles to unfold before trying to calculate where the 46 month cycle could end up.
AUDUSD Intermediate Cycles
The 46-month cycle (+/- 7months) is the half cycle to the 6.8-year cycle.
The 46-month cycle normally forms 2 phases of 23 months (+/- 4 months)
The 23-month cycle normally forms 2 phases of 47 Weeks (+/- 10 weeks)
The 13 October low at $0.6170 continues to hold. It occurred at a time that doesn’t fit well with the typical cycle completion for AUDUSD.
From last month:
At this point there are three possible scenarios:
The 13 October low looks increasingly like a low of significance…
The first scenario is that the bearish 23-month cycle is still current, as we’ve concluded in previous newsletters. This 23-month cycle started in January 2022 and with the starting low already taken out the market will decline and find a new low (below $0.6702) at the end of the cycle – expected to be September 2023 onwards.
The second scenario is that the 46-month cycle has finished early, at just 30 months. In the 14 occurrences of this cycle since 1971, there is only 1 shorter, the cycle of 1974-76 which lasted just 26 months. This treatment isn’t my bias.
The third and final scenario is that the phasing of the 6.8-year cycle is unfolding in 3 phases of approximately 28 months. Has this happened before? Yes. It can be seen at times running alongside the longer 46-month cycle in combination patterns.
Since last month, the double top of $0.7155 has held – a bearish signal. The market fell back into the downwards channel and well below both moving averages.
Of the scenarios above, the first is bearish, the second can be put aside as an unlikely outlier, and the third is bullish. My bias remains with the first scenario, although strong rallies that take out the $0.7155 double top may cause a switch in approach to the bullish third scenario. We’ll deal with that only if it happens.
Under the bearish outlook, we are 22 weeks into the 47-week cycle. As the cycle approaches it’s orb period, we are expecting it to also complete the 23-month cycle at a price at or below $0.6170. The orb for the 23-month cycle starts in September 2023.
AUDUSD Primary Cycle
The Primary Cycle for the AUDUSD is 22.5 weeks (+/- 4.5 weeks) - we'll call this the 23-week cycle
The 23-week cycle subdivides into 2 phases of 9-13 weeks (Half Primary Cycles), 3 phases of 6-9 weeks (Major Cycles), or a combination of these.
From last month: The bearish signs are there on the daily chart. The AUD is now classified as Bullish/Neutral Downgrade, with the price falling between the MA’s. There is a double top in place, and a head and shoulders pattern forming – to be confirmed with a break of support into the channel.
At the time of writing, the price has dropped to within 1 point of our price target, created by projecting downwards from the head and shoulders top. We are now entering week 22 of the Primary Cycle. Time and Price criteria have all been met for the completion of this cycle. The orb period doesn’t complete until 21 April, and another leg down is possible, but we should be prepared to go long at any time, particularly around the 17 March CRD, and also noting that the Sun will enter Aries on 21 March, which is also a historically bullish seasonal period for the AUD.
While short term bias is bullish, it’s not wise to assume it will continue. The new Primary Cycle could be the last in the 47-month and 23-month cycles, particularly if it extends out beyond 23 weeks, as the orb of the 23-month cycle approaches in September.