CYCLEPEDIALa enciclopedia del trading
ITENES
James Marsden Hurst 1924—2005

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A quién sirve esta entrada — Capítulo 3 explained what a moving average really is; here it becomes a forecasting tool: when the half-cycle average reverses, the trading cycle's move is exactly halfway done. The rest is measured with a ruler.

Fuente: J. M. Hurst, The Profit Magic of Stock Transaction Timing, Prentice-Hall, 1970 — Capítulo 6, How to Construct and Use Half-Span Moving Averages and Other Uses… (pp. 97–109).

Prerrequisitos

Cyclic moving averages (span, cutoff, −½-span placement) and a trading-cycle duration measured with the envelope.

The lab to get your hands on the placement:

HURST 1970 · CH. 3 The moving average, plotted properly Figs. III-10/III-11 redone: same average, two placements — only one is right CYCLEPEDIA DIAGRAM — EMICICLO price MA as everyone plots it centred MA (−½ span) SPAN 10 weeks CUTOFF between 6.5 and 13 wk RIGHT PLACEMENT −5½ weeks The average is not lagging: it sits in the wrong place on the chart.
Same average, two placements: centred at −½ span it runs down the middle of the channel.

The geometry of the half span

En palabras sencillas — The half-cycle average is the cycle, cleaned up — but you see it a quarter turn late. And a wave, a quarter turn after its low, is exactly halfway up. So: when you see the average turn, half the move is already done — and the other half is the forecast.

The reasoning runs in four steps. The book's numbers: a 20-week trading cycle, a 10-week centered average.

  1. The 10-week average draws the 20-week cycle, cleaned. Waves of 10 weeks and shorter are cancelled; the 20-week cycle comes through almost whole. So the average turns only when the cycle turns — and at the same points.
  2. But it is centered, so you see it late. Each of its values sits in the middle of the bars that produce it: the last drawable point is 5 weeks behind today (half a span).
  3. 5 weeks out of a 20-week swing = a quarter turn. The cycle's low shows up on the average a quarter cycle after it actually happened.
  4. And a quarter turn after a low, a wave is halfway up. So at the exact moment the average shows you its low, price has already covered half the move: however far it has come, that much remains.
HURST 1970 · CH. 6 The half-span geometry, in three steps A 64-bar cycle, its 33-bar centered average: why "average turns = half the move". SCHEMA CYCLEPEDIA — EMICICLO1 THE HALF-CYCLE AVERAGE DRAWS THE CYCLE, CLEANEDpricehalf-span average2 BUT IT IS CENTERED: YOU SEE IT A QUARTER CYCLE LATEtoday½ span3 SO WHEN YOU SEE IT TURN, HALF THE MOVE IS DONE — THE OTHER HALF IS THE TARGETtarget zone ±10%cycle lowhalf the move: donewhat happened next
The geometry in three steps: the average traces the cycle; you see it a quarter turn late; when it turns, half the move is done — and the future (dotted) goes on to claim the target zone.

"That it does work — time after time — is very powerful evidence indeed for the validity of the model."

Card — The basic procedure

  • 1. Average trading-cycle duration from a quick envelope.
  • 2. Average with span = half that duration (rounded; preferably odd).
  • 3. Plotted −½ span on the stock's chart.
  • 4. On reversal: how much has price already moved? As much again remains.

The precision version: two averages

En palabras sencillas — Add the full-cycle average: it is the channel's centre line. On the half-span's reversal, carry both through their lags to the price crossing: that level is the exact middle of the move. Target = crossing + the road already travelled, ±10%.

The full-span (20 weeks in the example) zeroes the trading cycle: what remains is the sum of the longer components — the channel's centre line, theoretical and clean (small "leaks" of short components smooth out graphically). On the half-span's reversal you extrapolate both averages through their lags to the crossing with price — easy for the full-span, it is so smooth. Then the ruler:

  1. crossing − previous extreme = half the move;
  2. target = crossing + the same distance;
  3. tolerance = ±10% of the total move → the prediction zone;
  4. rough timing: zone entry ≈ crossing date + ½ the half-span (broad tolerance: in the book, 5 weeks predicted against 9, 3–6 and 3–5 observed).
HURST 1970 · CH. 6 Half-span and full-span: predicting the move Figs. VI-1/VI-6 redone: the half-cycle average turns halfway — the rest is measured CYCLEPEDIA DIAGRAM — EMICICLO price half-span (10 wk) full-span (20 wk) RULE reversal = half the move TARGET crossing + leg already done TOLERANCE ±10% of the total move Not an oracle: a ruler. Half the move done, half to go.
Figs. VI-1/VI-6 redone: the half-span turns, the extrapolations cross the price, the zone waits ahead.
Tap the reversal, the crossing and the zone

In CycleSic this is the "Half-Span Hurst" indicator (EMICICLO category): turns, crossing and ±10% zone drawn automatically — with its twin oscillator "Inversa Hurst" for the fast wave.

The full-span's other gift

Warning — The full-span sees channel turns before the envelopes, real or non-real-time. On Alloys: a cycle high of 48¾ under the previous 49¾ — everything suggested the channel was still down. But the 20-week average was rising: the long sum had turned, the channel had bottomed at 32⅛. Envelope analysis alone could only confirm it three weeks later, at the 52⅞ top.

And the graphics-computation duet works both ways: where the channel is not obvious, plotting the two averages "makes identification of channel bounds very much easier" — then the refined duration rebuilds better averages.

Summary card

Element Rule
Half-span Span = ½ trading cycle; reversal = half the move
Full-span Span = trading cycle; it is the channel's centre line
Target Extrapolation crossing + leg already done
Zone ±10% of the total move
Time Crossing + ½ half-span (broad tolerance)
Bonus The full-span anticipates channel turns

Enlaces

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