The conclusion: His work, and by that I mean the core, is profound yet securely guarded in chapter 11 and the appendices of Profit Magic; you know the part of the book that everyone who reads it skips due to the appearance of equations consisting of summation signs, polynomials regression, and worse .In fact, I would wager than the number of people who have worked through it all could be counted on the fingers of one hand (I have no factual data to back this up except to say not too many traders are profitable and not too many traders use Hurst(correctly). Profound? Sure…look at William’s work!
But now the question: Hurst wrote in the 1970’s. Profit Magic, true to the time of its writing, references what to do in the event of a war, but does not deal at all what do with a world wide debt laden fiat money system clearly under control of Central Bankers. And he also wrote that most of the price action(75%) consisted of the long term, slowly changing trend with a small but significant additional component of “cyclicality.” But what happens to all of this under our present conditions where the concept of price discovery may be a fond memory causing the market to cruise in”trend” mode?
Given the potential of a 4.5 year high, and going back to 1987 I can extract 2 long term oscillations: from 1987 a 92 mo wave and from 2002 a 41 mo wave. Not exactly perfect harmonicity, but that is what the math says so we go with it. I’m fine with 41 mo but 92 mo is outside of the approved Hurst range and so should be weighted less strongly in our consideration.