In his 1970 book, Hurst reexamines a Perkin-Elmer chart from March to September 1961: two triangles, formations in which price swings narrow, both end in downward breaks. He compares the charting rule of trend continuation with the state he assigns to four cycles.
This is an illustrative historical case. The pages examined do not report a forecast recorded before the events of 1961 or a test on new cases.
The chart and the durations
Hurst states that he took the daily high-low chart from a popular charting manual. By measuring the distances between lows, he identifies four average durations; the nominal values are references from his model, not additional measurements of the stock.
| Duration observed by Hurst | Comparison within his model |
|---|---|
| 13.9 weeks | Nominal duration of 13 weeks |
| 4.6 weeks | Equivalent of the 3.25-week nominal duration in this 1961 case |
| 2.3 weeks | Equivalent of the 1.625-week nominal duration in this 1961 case |
| 1.15 weeks | Half of the 2.3-week component |
The two triangles in the author's interpretation
First triangle. Hurst identifies three 1.15-week swings and describes the formation more precisely as a flag, a brief consolidation pattern. The charting rule he cites favored continuation of the preceding rise; his table instead assigns a downward direction to all four components. The price breaks downward. Hurst argues that the cyclic reading would have made it possible to anticipate this charting-rule “failure.”
Second triangle. Hurst identifies one cycle and much of a second 4.6-week cycle as the 13.9-week component passes its peak. In his table, the three longer components are falling and the 1.15-week component is near a low. He also interprets the preceding, lower 13.9-week low as weakness in the longer components. The second break is downward too: here the charting rule and cyclic interpretation agree.
Outcome and evidence limit
The document shows an outcome consistent with Hurst's reconstruction. The claim that pattern failures can be anticipated belongs to the author: a single chart does not measure success rates, false signals, or results after costs.
For the reader, the case helps distinguish measured durations, assigned cyclic state, and observed outcome. Testing the method would also require repeatable rules and data excluded from the construction of the explanation.
Sources
- J. M. Hurst, The Profit Magic of Stock Transaction Timing, Prentice-Hall, 1970, Ch. 3, pp. 59–61, Fig. III-9 — chart, four periodicities, state tables, and interpretation of the two triangles.
Further reading
- Full Perkin-Elmer case — component positions, a Cyclepedia diagram, and the limits of the reconstruction.
- Triangles and cyclic analysis — the mechanism proposed by Hurst.
- Case studies index.