Cycles Within Cycles

Forty years ago, an aerospace engineer named J. M Hurst did some fascinating work in T/A regarding the cyclic movement of stock prices. One of the things he discovered is that prices in all markets tend to oscillate in cycles around given time periods. These time periods are harmonic and reappear again and again in all markets.

A few of these given time periods that should appear in the short term daily chart are the following:
8.125 days
16.25 days
32.5 days
65 days
and so on in harmonic progression....

These time periods can be expected to expand and contract within a narrow range over time corresponding to volatility. In more volatile markets we would expect these cycles to be a few days longer and in less volatile markets, a few days shorter. Generally in the QQQ chart the 16.25 day cycle will usually be dominant, but for the last year or so, the 32.5 day cycle has been dominant.

If we apply the market's current volatility level to Hurst's formula for determining cycle wavelength, his theory tells us that the 32.5 day cycle should currently be oscillating at approximately 37.5 days. If we go to the chart we find a cycle oscillating on average at a little less than 39 days. This is illustrated by the green arrows on the above chart.