Replies to post #13390 on Short Term Trading Member Forum

[Blackbelt1]

Thanks Cash for the thorough reply. Here is the huge positive of Hurst analysis: It is signal processing, and if the market sends a signal contrary to ideal cycle expectations, we know it soon to immediately. And what I have learned from both you and Airedale is to dig deep and look wide to grasp the real meaning of any variations.

Thanks again.

Blackbelt

[DowDeva]

Mr. C, what indexes are in your G1 and G2? I am thinking of RIMM, which I 'intuitively' feel might hit $40 in early January/late December - so that would make it a G2, I suppose. I really, really want to start opening up shorts here....but not sure of timing...hourly chart actually a little bullish, but daily becoming over bought on lower highs.

I am catching up a little on posts here, so good to see you all again. Sort of putting on a pair of comfy bedroom slippers you misplaced, you didn't know how much you missed them until you put them on again.

;)

Deva

[umitd]

Cash, I've discussed a similar idea with Aire some time ago.
After analyzing many stock charts thru commonality phasing, it
seemed to me that there were 3 groups of stocks:

- those who had their 80w low in Jul 02
- those who had their 80w low in Sep 02
- those who had their 80w low in Mar 03

(last 2 being the majority)

So, it would not be unexpected to see their composite
effects on the indices. And I don't think that this goes
against Hurst's method. When he does CPA in one workshop
he comes up with 2 different groups of stocks, each group
with different phasing. If this is the case and if the indices
are derived from stocks with different cyclic groups, why
wouldn't the indices reflect all of them?

So this was the first question that occurred to me. If that
indeed was the case, we could make perhaps a better analysis
by taking the "crosscurrents" into account.

The second question (which is more heretical :-) I asked
was what if those cycles act on the cycles of other stocks?
I mean, if there is a 80w cycle from Oct 02, could we see an
otherwise unexpected trough on a Mar 03 80w stock, while
the cycle starting from Oct 02 was coming to an end?

Here is an example: HD is clearly a Mar 03 stock. 80w nominal
cycle is 74w actual. So, 10w nominal is 9.25w.
Yet, 12w before the next 80w low in Aug 04, we see a low
almost as much as the Aug 04 low, in May 04 which should
be the 84w low for Oct 02 stocks!
(I may post the chart later, Now I gotta go)

Is it variation or crosscurrents? I don't know.

Yes it is just a theory, but if it has some truth, it would
help us to make more accurate analyses.

Good trading all..