17 replies to this topic

[NAV]

nav, we will see spike tops and rounding bottoms in individual equities as well as commodities. part of that is the sensitivity to fundamentals of the vehicle examined. stock indexes show the summed cyclic action of their underlying components, thus a smoothing of price action based on individual component fundamentals occurs. in some "commodities" such as foreign currencies, we often see the rounding tops and V lows in the dollar and the inverse in the currency traded against it. many commodities also are much more subject to specific fundamental events of a short term nature particular to them. crop reports, weather, etc.

fundamentals do play an important role in price action. as Hurst described what he called the "price motion model". 75% of price action was forseeable fundamental events, long term, smooth, and trend like in nature. 2% was unforeseeable fundamental events that add specific randomness to price motion.the rate of occurrence is small but the effect can be large and sudden. 23% of of all price motion is oscillatory, complex but semi predictable. (cyclic price action).

Thanks.

[BearItch]

It seems to me you had difficulty predicting when the 5/6 day cycle would bottom and had similar difficulty predicting when the 5 week cycle would bottom as well (monday +/- one day). Your predicted days were offf and were only able to confirm the cycle lows after they had happened. Maybe it is the smaller time frames to these cycles and you analysis works better in longer time frames (longer cycles) but in smaller timeframes it appears to be rearview thinking which is good at telling us what happened after it happened. This is good to know but seems almost impossible to trade on -- again in smaller cycles at least. I think you have the 4.5 year cycle coming in anywhere from May until the end of July. Is this correct? Thanks.

Edited by BearItch, 14 April 2007 - 03:17 AM.

[airedale88]

i've posted more than once i expect the 4.5 yr low in late july. as far as your other comment, it's up to each individual to decide if there's any merit in using Hurst's methods. if you're looking for the holy grail you will not find it. i've found it very useful on all time frames. the price projections and time windows are used as expectations of what should occur. actual trade signals applying Hurst's methods are based on the use of either cycle based trendlines or fld breaks with cycle derived stops.

[BearItch]

Don't get me wrong. I enjoy your posts and appreciate your efforts and willingness to share. Anyone who shares their approach doing a great service for others. I like the approach and it has some merit. But like anything else, it has it seems to have limits and weaknesses. An open dialogue about such things is a good thing as well. Thanks again for sharing.

Edited by BearItch, 14 April 2007 - 05:03 PM.

[LeroyB3]

...and were only able to confirm the cycle lows after they had happened.

How else can an event be confirmed until after the event occurs?

LB

[Echo]

It seems to me you had difficulty predicting when the 5/6 day cycle would bottom and had similar difficulty predicting when the 5 week cycle would bottom as well (monday +/- one day). Your predicted days were offf and were only able to confirm the cycle lows after they had happened. Maybe it is the smaller time frames to these cycles and you analysis works better in longer time frames (longer cycles) but in smaller timeframes it appears to be rearview thinking which is good at telling us what happened after it happened.
This is good to know but seems almost impossible to trade on -- again in smaller cycles at least.

I think you have the 4.5 year cycle coming in anywhere from May until the end of July. Is this correct?

Thanks.

BearItch, the best answer to your question on smaller cycles is Hurst's principle of variation. While the recent samples of a given cycle length, say the 5 wk for example might average 23 days, it will only come exactly 23 days once in awhile. Other times you might find yourself waiting for it and on day 21 it bottoms and takes off and if you wait for day 23, you have missed a good portion of the takeoff from the bottom. Other times you jump in long on day 23 and guess what. The market keeps going down and bottoms on day 25, perhaps after you get stopped out and then takes off without you. There is variation. It does not run with the reliability of the French trains.

So in a sense, your observation is reasonable. Hurst talks about various methods for entry, exit, stop loss and risk management that can address your points. Legging/scaling into positions has helped me out with the above mentioned lack of pinpoint precision 100% of the time. If you start out with the premise that no method can pinpoint exact bottoms all the time and predict the market, then Hurst provides excellent tools to stay on the right side a great deal of the time, and many times can pinpoint cycle lows with amazing results.

Echo

[GOOSE2]

airedale.......where would you mark the last 3.5 cycle? 4/12 morning low, maybe the 11:30am time frame? (I think you had the 10-11am sideways action on 4/5 as the last 3.5)

[airedale88]

airedale.......where would you mark the last 3.5 cycle?

4/12 morning low, maybe the 11:30am time frame?

(I think you had the 10-11am sideways action on 4/5 as the last 3.5)

goose, phasing cycles always should be done from the largest to smallest, keeping in mind they are 2 X harmonics. the 5 wk cycle bottoms on 4/12, so that is a nominal 3/3.5 cycle low. keep in mind the principle of variation, this 5 wk cycle ran approx 21 days, so the average length of the eight 3/3.5 day cycles contained in the 5 wk cycle works out to 2.625 weekdays, 3.75 calendar days. there was another nominal 3 day cycle between the 4/5 area and the 4/12 low. that cycle bottomed around the 4/9 close and the 4/10 open.