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Hurst identified six component cycles for the DJIA which he claimed
accounted for all of its price action to within + or - 1%. They were
nominally: 6.5 weeks, 19.85 weeks, 34.6 weeks, 15.7 months, 4.5 years, and 9
years.
For trading purposed, Hurst kept track of the following cycles: 1.15 week,
2.3 week, 4.6 week, 13.9 week.
On his weekly charts, he plotted 10 and 30 week centered moving averages
with their associated envelopes. I believe he used the same parameters for
daily charts.
Hurst did mention using odd numbers for the MAs to facilitate hand plotting
and analysis.
I don't remember a discussion of tangents to establish targets. I believe
Don's description, using 10 and 30 period MAs, is accurate. The targets are
just targets, sometimes the work like magic. Other times, prices fail to
reach the target or shoot right past.
I like the simplicity of visually observing cyclical time and the
oscillation of prices within three levels of nested channels. Of course, the
setup and triggering of actual trades gets more complicated.
Stan
-----Original Message-----
From: Ira Tunik [mailto:irat@xxxxxxxxx]
Sent: Saturday, May 19, 2001 1:08 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] SBUX
No! What he does is take the cycle and and half cycle then offsets them by
half. You select the cycle that you wish to trade. He was enamored with the
14
and 28 week cycles which seemed to work out in his research. Now most of
this
is from memory so give me a little slack on this. He usually uses an odd
number
for the cycles as those are the only ones that you can line up under a bar.
A
10 bar moving average falls between bars 5 and 6, an 11 bar moving average
ends
up on bar 6. so if you are using 11 and 21 as the cycle and 1/2 cycle you
would
offset one moving average of one by 6 and one by eleven bars. Then you
extend
the tangents of these moving averages to the point of intersection for the
projected target. There are inherent problems in drawing tangents, even on
a
computer. I did not find that this was productive when I started using
Hurst's
work in the early 70's. I have found that the most useful part of his work
is
just a basic cycle count. I haven't used channels for over 20 years now. I
find that guessing always managed to get me into trouble. I prefer
something
more exact. Ira.
Don Roos wrote:
> Ira:
>
> I believe that is what the Hurst approach does do. He uses a 10wk ma and
a
> 20wk ma, and uses the point at which they cross as a means of
extrapolating
> the extent of the current move, by measuring from the prior peak to the ma
> cross and then extending a similar distance for the projected turning
point.
>
> Stan:
>
> The enclosed continuous chart of the non adjusted daily spoos uses keltner
> bands: the short term on the daily data (10d, displaced 5d), and the long
> term on a weekly data stream .
>
> This area is of particular importance, as HA and others have written,
being
> at the top of the wide keltner channel, and the top of the trendline
channel
> (with a possible breakout close on Fri), following the upside break of the
> .62 retracement level and the mob on Wed last week. This in the face of
> very low atr levels, and the previously described "vix triangle", we
should
> see resolution of the breakout vs down again question very soon.
>
> Best regards,
>
> Don
>
> ----- Original Message -----
> From: "Ira Tunik" <irat@xxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Saturday, May 19, 2001 12:25 PM
> Subject: Re: [RT] SBUX
>
> Why don't you use his offset moving averages to project direction and
> pricing
> targets? Ira
>
> Stan Book wrote:
>
> > The Hurst channel extrapolation shown for SBUX may well be overly
> > optimistic, but the channel is flattening. The 'projected' high
> probability
> > buy opportunity is based on the observation of visual patterns and an
> > extrapolation of past post turn price behavior - a 'possibility', not a
> > certainty. Future price action will determine if this becomes a viable
> high
> > probability opportunity.
> >
> > The purpose here is to partially demonstrate a low risk, high
probability
> > way to set up trades for gentle souls who seek the safest possible
trades
> in
> > order to protect capital and achieve modest, reliable appreciation. This
> one
> > is not for rodeo cowboys.
> >
> > Because markets are fractal, the approach also applies to other time
> frames.
> >
> > Stan
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> >
>
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> > Name: SBUX_010518.gif
> > SBUX_010518.gif Type: GIF Image (image/gif)
> > Encoding: base64
>
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> ------------------------------------------------------------------------
> Name: 051901fdt1.gif
> 051901fdt1.gif Type: GIF Image (image/gif)
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