Time marches on, and as most of us get caught up in the momentum of our chosen disciplines, we unfortunately waste little time in honoring the pioneers that blazed the paths before us.  Even the greats among us have taken the time to pay homage to their ancestors.  It was none other than Isaac Newton that once remarked, “If I have seen a little further it is by standing on the shoulders of Giants.”  In the arena of modern cyclical analysis, there is a forgotten “Giant” by the name of J.M. Hurst.  His contributions have earned him the title amongst his followers of “the ‘Father’ of modern cyclic analysis”.

There has not been much written about this enigmatic individual, an aerospace engineer by profession, who published his seminal stock trading research in the seventies entitled, “The Profit Magic of Stock Transaction Timing”.  He followed this book with an extensive workshop course that got to the heart of his groundbreaking techniques.  As luck would have it, his works on market timing were released during a major bear market.  No one of significance took notice, but his classic work has drawn a “cultish” following, as evidenced by numerous websites and newsletters that focus on his methods.

From his engineering background and intricate knowledge of wave patterns in nature, Hurst and his advocates invested over thirty thousand hours of computer time trying to unlock the mystery of wavelike patterns within fluctuating stock prices.  For the first time, the power of the computer was unleashed on mountains of ticker tape data.  One example of his findings is depicted in the diagram below:

In this case, Hurst produced what he called “displaced moving averages”.  The intersections of these averages than became the midpoints for accurate projections of future peaks and valleys, based on his proprietary formulas.  With these tools and others, Hurst was able to claim a success rate of 90% in his trades, the obvious reason for recent attention from the trading community after decades of obscurity.

His methods have not been confined to stocks alone.  Traders have applied his techniques to bonds, commodities, and even currency trading.  Fresh new insights are now available to unscramble the vagaries of corn futures or even the nuances of the “USD CHF” currency pair.  Much of the resistance in the trading community for resurrecting Hurst’s original work was due to its foreboding length and complexity.  His book can be hard to follow, and his 1,500+ pages of training materials do not easily reveal his secrets.  As with Elliott and Gann, one must invest the time to become accomplished in this art form.  If you are looking for a “quick fix”, go elsewhere.

Traders, however, do not have to start at square one to get acquainted with Hurst’s methodology.  Much of it has been field tested since 1971, and various websites even offer customized software tools that will assist in applying his original methods that include not only his displaced moving average approach, but also his more definitive studies in “channel and envelope” analysis, noted by many as the real cornerstone of his research.

Hurst’s study of cycle harmonics can become a powerful analytical tool for those that wish to invest the time necessary to gain proficiency with it.  Has Hurst spoken out publicly in recent years on his work?  Unfortunately, Mr. Hurst passed away in 2005.  After being rebuffed by the trading community in the seventies, he disappeared from the public spotlight, never to be heard from again.  His legacy lives on, however, a potential treasure trove for the trading enthusiast.