A big moment for a Hurstonian is when price touches one of Hurst’s cyclic tools.
(I am stealing William’s term Hurstonian, which sounds so much better than Hurstite, or Hurstie and is so much more fun than Hurst Analyst)
Hurst defined two cyclic tools, the FLD (Future Line of Demarcation) and VTL (Valid Trend Line). They are both lines on a chart, and when price touches one or other of them it has some cyclic significance.
That cyclic significance is basically information about what the cycles are doing in the market. Such as confirmation that a trough of a particular cycle has occurred (and therefore the market is moving up now towards the cycle’s peak).
One of the tricky things about the cycle tools is that they are not static price levels – they both move up or down each bar.
Sentient Trader users have been able enjoy these “cycle moments” by having the software send them alerts when they occur.
Those cycle moments have always felt a little lonely though. A quiet moment between you, Sentient Trader and your smart phone, but this week I am pleased to announce that they will be lonely moments no longer!
I have been testing a system that broadcasts Hurst Cycle Alerts via Twitter (and Facebook will be following soon), and it is all now up and running. Here is a tweet sent this morning:
How can you share in the Hurst moments?
Simply follow Sentient Trader on Twitter by clicking on the Follow button here (http://twitter.com/#!/sentienttrader). You will need a Twitter account of course … something that I never previously saw the point in to be honest, but I do now!
Not only can you “share the cycle moment”, you can also pass it on to others who are interested in your thoughts (your Twitter followers). Simply “retweet” the tweet:
You can also “favorite” the tweet (which I guess tells others that you really enjoyed the cycle moment):
An example
In the tweet shown above we are told that price touched the 40-day VTL from above. What can we do with that information?
The first thing you would need to do with any alert is understand the context of the analysis. I discussed the DAX in Monday’s Hurst Trading Room podcast (and even mentioned the 40-day VTL), and so understanding the analysis situation would not be difficult at all, even it meant going back to that video (scroll to 30 minutes and 25 seconds).
Here is a snapshot of the DAX today:
As you can see the current bar has touched the 40-day VTL (which is that blue dashed line). What does this mean?
In analysis terms we know that the 80-day cycle peak is confirmed. And that indicates that we should go short for the move into the 80-day cycle trough. We can calculate a target of approximately 9362 from a separate alert (not shown here). Bear in mind that the target is not expected to be reached because of the bullish underlying trend of the 80-day cycle. I won’t go into all of that here, but the bottom line is that we don’t expect price to go as low as 9362. A more reasonable target would be in the 9400-9500 range.
That still implies a move down, and so in trading terms one could use this alert to enter a short trade in the DAX, after first being certain that you agree with the analysis, and waiting for the price to actually cross the VTL. Remember that VTL’s can provide levels of support just as any trend line does.
I am hoping that these alerts will prove useful – please let me know how I can increase their usefulness.
I look forward getting your feedback about the Hurst Cycle alerts, and please get busy favoriting and retweeting to help spread the word about Hurst Cycles!
