Cycles-related WealthScript script

[Guest]

Those of you who are learning Hurst's methodology might find it interesting to play with this script. It is not a trading system (doesn't issue trading signals) - but you can plug any symbol you want in Yahoo! Finance format (e.g., ^SPX) and get a Hurst envelope:

 

 

Doc (or any other who relies heavily on Hurst's methodology and is familiar with it) - could you comment on the usefulness of this script?

 

Regards,

Vesselin

[GregFokker]

The tail end of the charts seem to go awry- the "projection" part seems to be a problem. Otherwise, seems an excellent tool. Can't decipher the RSS cycles- any clue how to use them?

[Guest]

The tail end of the charts seem to go awry- the "projection" part seems to be a problem.

That's always a problem when using Hurst's method. Since the envelope is based on centered MAs, and they end before the last bar, one has to find some way to project the envelope into the future. Doc does it (i.e., determining his cmaps) by "feel", based on his experience. It can also be done by various computational methods - but they will yield different results, depending on the particular method used.

 

This, BTW, is where I disagree strongly with Doc's critique of Elliott Waves as being subjective while Hurst's method being objective. It's not true. Every TA technique is open for interpretation. In Hurst's case, this is the cmaps. Another anal cyst, using the very same method, can come up with cmaps different from Docs - and you won't be able to find any obvious mistake in any of the two analyses.

 

This particular script computes cmaps and extends the envelope as a parabolic projection. The parabolas are computed from the 3 last points of the respective centered MA and the projected part for each envelope begins after the vertical dashed line in it. In other words, everything before that dashed line is correct, everything after it is subjective and specific to the particular method used to determine the cmaps. As you have noticed, this script's method clearly isn't as good as Doc's.

 

Otherwise, seems an excellent tool.

 

At least for determining the periods of the dominant cycles and their tops and bottoms (after the fact), yes.

 

Can't decipher the RSS cycles- ?any clue how to use them?

 

Basically, they are RSIs. RSIs of differences of MAs of MAs, with different periods, reflecting different cycles. The cycle periods are determined using Hilbert transformations. The author of the script uses these RSIs as proxies for the various cycles - pretty much like Doc uses ROCs with various periods.

 

Regards,

Vesselin

[sniff]

bontchev,

 

I found the Chart Script helpful... Not so much for determining entry and exit points... But as part of my scanning proscess...

 

I do not trade the indices much... mostly selected shorts ( near major tops)... I can see how far into a cycle a short might be. So, I run 5 short candidates through Chart Scripts , preveiously selected by candlestick patterns....... Of the 5 maybe 2 or 3 are not to deep into the cycles, Suggesting they might have a little more staying power, timewise.

 

It is to early to tell if this particular Chart Script, will stay within my bag of tools.

 

But the potential seems to be there.

 

thank you for bringing it to my attention

[Guest]

The author of the script has a new version of it. I have updated the link and the chart in the first message of this thread to reflect the new version.

 

Regards,

Vesselin