Condensed case — Test bench for the computational method: every half-span turn generates a ±10% zone. For Figs. VI-1/VI-8 and full operational sequence → encyclopedia entry.
Source: Hurst (1970), Ch. 6. Trading cycle measured 17–22 weeks, assumed 20 (half-span 10, full-span 20). Stock already cited in Ch. 1.
Context
Alloys Unlimited returns as a demonstration of the computational ruler: four turns of the 10-week average, four forecast zones, four outcomes within tolerance. The case also shows the method's limits — rough time estimates — and the added value of full-span and inverse over envelopes alone.
Setup
Rule applied whenever the half-span turns: extrapolation to the full-span cross, leg already travelled, symmetric target, ±10% zone.
| # | Half-span… | Forecast zone | Outcome |
|---|---|---|---|
| 1 | low | 48–52 (target 50) | top 48¾ |
| 2 | high | 33½–36½ (target 35) | low 35⅛ |
| 3 | low | 50⅝–54⅛ (target 52⅜) | top 52⅞ |
| 4 | high | 39⅜–41⅞ (target 40⅝) | low 41 |
Forecasts drive real operations: hold, sell/short, cover and rebuy, short at 51–52 with comfort from the inverse.
Card — Parameters
- Trading cycle: 20 weeks (range 17–22).
- Averages: half-span 10 · full-span 20.
- Correct forecasts: 4 of 4 within ±10% zone.
Sequence
- First turn — half-span low → zone 48–52; hold until top at 48¾.
- Second turn — high → zone 33½–36½; sell/short; low at 35⅛.
- Third turn — after cover and rebuy ~37; hold to 52⅞ («price rushed into the zone»).
- Key moment — after the 32⅛ low the chart was ambiguous (lower high); full-span rising → 20-week channel already turned at the low, 3 weeks before envelopes.
- Fourth turn + inverse — short at 51–52; inverse estimates 40½ vs 40⅝ half-span; actual low 41.
Outcome / Lesson
Four zones, four confirmations. The book scales down: «will not always provide this much information». Order remains: graphic techniques first, half-span as confirmation — and Ch. 5 defensive toolkit always active. Decisive added value: the long channel turn seen before envelopes confirm it.
Lesson — Computational ≠ envelope substitute. A complement that, on cyclic names like Alloys, anticipates turns and quantifies operational zones.
Operational lesson today
| Step | What Hurst did | Modern parallel |
|---|---|---|
| Half-span turn | Defines ±10% zone before the envelope confirms | FLD / cyclic timing as filter, not sole trigger |
| Full-span ahead of envelope | Long channel turned 3 weeks early on the low at 32⅛ | Multiple timeframes: longer cycle overrides ambiguous short structure |
| Inverse vs half-span | Short at 51–52 with inverse target 40½ vs 40⅝ | Cross-check forecasts from two independent rules |
| Real trades | Hold, sell/short, cover, re-buy — not paper only |
Takeaway — Alloys is not proof that math replaces charts: it shows how **computational rules** tighten zones when the stock is cyclic. On crypto or thin names, start from chart context and treat half-span as optional confirmation.
Full encyclopedia entry
Case Alloys Unlimited — original plates, hold/sell/cover sequence.