Hurst Nominal Cycle Model
Hurst's cycle theory states that the movement of financial market prices is the result of the combination of harmonically related cycles. Hurst recommended a collection of 11 cycles for daily analysis. These cycles are referred to as the Nominal Model.
He did extensive research and discovered 11 cycles ranging from 5 days to 18 years found in a large number of stocks. He published the average wavelength of each of these cycles in his Cycle Course.
Nominal cyclical model is actually the full name, but is simplified to Nominal Model for simplicity. Thus, for example, what we are often referring to is the nominal 20-week cycle, which means that we are discussing the cycle to which the name 20 weeks has been given. The cycle is not really 20 weeks long due to the dynamic nature of cycles. Cycles are not perfectly even. Cycles vary around their length, phase and amplitude over time. Therefore the use of additional techniques to deal with the principle of cycle variation, like Digital Signal Processing, are required.
The Hurst Nominal Cycle Model
|Name (Nominal Cycle)||Average length||Average length (days)|
|5 day||4.3 days||4.3 days|
|10 day||8.5 days||8.5 days|
|20 day||17 days||17 days|
|40 day||34.1 days||34.1 days|
|80 day||68.2 days||68.2 days|
|20 week||19.48 weeks||136.4 days|
|40 week||38.97 weeks||272.8 days|
|18 month||17.93 months||545.6 days|
|54 month||53.77 months||1636.8 days|
|9 year||8.96 years||3272.6 days|
|18 year||17.93 years||6547.2 days|
Source: Hurst Cycles Course