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A quién sirve esta entrada — A moving average flattens the short cycles to show you the trend. The inverse does the opposite: it throws the trend away and shows you only the short cycles. It is the tool for seeing the market's fast wave, clean.

Fuente: J. M. Hurst, The Profit Magic of Stock Transaction Timing, Prentice-Hall, 1970 — Capítulo 6 (pp. 109–112, Fig. VI-8).

What it is

En palabras sencillas — It is a subtraction: price minus centered average. The average holds only the slow movements; take it away from price and only the fast ones remain, drawn around a zero line.

The reasoning, in three steps:

  1. Price is a sum of waves: slow cycles + fast cycles + trend.
  2. The centered average keeps only the slow part: cycles shorter than its span are zeroed out.
  3. Price − average = the fast part alone, with its true amplitude, readable directly on the scale.
HURST 1970 · CH. 6 The inverse average, in three steps Real math: price = slow wave + fast wave. Subtracting the average reveals the fast one. SCHEMA CYCLEPEDIA — EMICICLO1 PRICE = SLOW WAVE + FAST WAVEprice2 THE CENTERED AVERAGE KEEPS ONLY THE SLOW WAVEcentered average3 PRICE − AVERAGE = THE FAST WAVE ALONE, AROUND ZEROzeroinverse
The three steps of the inverse: price is two waves added together; the centered average keeps the slow one; the subtraction reveals the fast one.

One technical detail you must not get wrong: the centered average must be aligned to its true position (half a span back from the last bar) before subtracting. With an odd span every value of the average falls exactly on a bar: direct subtraction, no interpolation.

HURST 1970 · CH. 6 The inverse: what the average throws away Fig. VI-8 redone: subtract the average from price and the short cycle appears on a zero baseline CYCLEPEDIA DIAGRAM — EMICICLO PRICE + CENTRED AVERAGE (11 WK) THE INVERSE — PRICE MINUS AVERAGE FORMULA price − centred average ON ALLOYS 12.7 wk · 7 points CONFIRMATION estimate 40½ → low at 41 In the average’s wastebasket sits exactly the cycle you needed.
The book's Fig. VI-8, redrawn: above, price with the 11-week average; below, their difference — the short cycle, in full view.
Tap the peak and the info point

What it tells you

Three things, all readable at a glance:

  • the fast cycle's duration: count the bars between two lows of the oscillator;
  • its true amplitude, in points or percent — no need to estimate it from an envelope;
  • where it stands in its swing right now: above zero, below, rising, falling.

And you get it for free: if you already use the half-span, the average is already computed — only the subtraction remains.

The book's example (Alloys Unlimited)

Hurst is short from 51–52, but price has been drifting sideways for nine weeks: hold or close? The inverse answers:

Question The inverse's answer
Which fast cycle is there? One of ~12.7 weeks, about 7 points wide
Where does it stand? Week 7 → its low is due in 3 to 9 weeks
And the trading cycle (21.7 wks)? At week 19 → low due in 1 to 4 weeks

Both cycles still have to fall → the short is kept. Adding up the decline each cycle still owes, Hurst estimates the low around 40½. The stock bottoms at 41, one week later. All of it recovered from information the average, by itself, had discarded.

When to use it

Card — The four uses from Capítulo 6

  • Inspecting any component: set the span to its duration and it appears alone, at true size.
  • Near an entry or an exit: the fast wave removes doubts about trend lines and channel turns.
  • Before buying: if the oscillator has almost died out (amplitude near zero), the cycle has shrunk — that signal will not pay.
  • On triangles: the fast component shows how the pattern is forming and which way it will break.

In CycleSic it is ready to use: the "Inversa Hurst" indicator (EMICICLO category), in a panel below the chart — with the cycle duration attachable automatically to the dominant cycle.

Caution

Caution — The separation is not surgical: cycles with a duration close to the span pass into the average only in part, so a residue of them ends up in the inverse too. Fine for reading the dominant component; for precision separation you need Capítulo 11's filters.

Summary card

Element Rule
Formula Price − centered average (aligned half a span back)
Content Only cycles shorter than the span (+ residues near the cutoff)
Span Odd; typically half the trading cycle
Amplitude Read directly on the scale, around zero
Uses Trailing, target confirmation, pre-buy check, triangles

Enlaces

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