Who this entry is for — Chapters 4–5's graphic methods already suffice. But "if you don't mind adding some arithmetic", decision confidence grows greatly — and the range of workable stocks widens. This is Chapter 6's map.
Source: J. M. Hurst, The Profit Magic of Stock Transaction Timing, Prentice-Hall, 1970 — Chapter 6, Compute Your Way to Increased Profits (pp. 97–113).
Prerequisites
Cyclic moving averages (Ch. 3) and the graphic methods of Chapters 4–5: computation here is a complement, never a substitute.
The chapter's three tools
| Tool | The idea in one line | Entry |
|---|---|---|
| Half-span MA | Span = ½ trading cycle: when it turns, the move is halfway — the rest is measured | Half-span and full-span |
| Full-span MA | Span = trading cycle: zeroes the cycle → it is the channel's centre line, and sees turns before the envelopes | Half-span and full-span |
| Inverse | Price − (aligned) average: the short cycle remains, magnitude included, on a zero baseline | Inverse moving average |
The test bench, with four consecutive in-zone predictions: Case Alloys Unlimited.
The chapter's conclusions (its close, condensed)
- Half- and full-span averages predict the extent of price fluctuations; envelope analysis supplies the trading-cycle duration to start from.
- Both averages are plotted with their lag (−½ span each).
- On the half-span's reversal: extrapolation to the crossing with price; the move from the previous extreme to the crossing is half the total; symmetric target, zone of ±10% of the move.
- Rough timing: crossing + ½ the half-span, with broad tolerance.
- The averages help establish correct envelope bounds — and the full-span detects channel trend changes before real and non-real-time envelopes.
- Powerful, but never alone: always in conjunction with every other method.
- The inverse half-span identifies the component next shorter than the trading cycle — the trailing-level one — and displays magnitudes directly.
- The inverse on an extracted cycle reveals the state of its magnitude-duration fluctuation — the check to run before acting on a buy ("you may find your trading cycle has shrunk to near zero in size").
Warning — The book's hierarchy stays clear: "graphical envelope analysis and valid trend lines can be depended upon for the most accurate and detailed information regarding move termination timing". Computation adds confirmations, magnitudes and early channel turns — it does not replace the craft of the preceding chapters. Nor is it empiricism: every property descends from the model (the mathematics is in Appendix IV).
Links
- Half-span and full-span · Inverse moving average · Case Alloys Unlimited
- Cyclic moving averages — the foundations (Ch. 3)
- Appendix IV — the frequency response, derived
- Hurst tradition — chapter index