11 August 2005
The European and Asian Equity Growth Fractal Finales
Peak oil is a real phenomenon. It is occurring and will occur. Nevertheless,
when the global economy collapses in a deflationary over- capacity
debt-encumbered depression, the demand for oil will mitigate - but only
transiently - for a decade or so.
As of 9 August 2005, the growth fractals for the composite American
equities, which represent the sizeable fraction of global equity worth, has
- with reasonable probability - been completed with respect to a maximal
valuation secondary to the highs of March 2000. Telltale at this near
global US equity summit point is the very contrasting new 35 year low for
venerable Delta Airlines which closed today below 2 for the first time in 3
and 1/2 decades, down over 94 percent from its high of over 70, 5 years ago.
Bank stocks are sinking, having received and continuing to receive
broadsides from both the Fed's increasing interest rates and the narrowing
short term-long term spreads. The interest rate dependent real estate
stocks, e.g., HGX, are breaking lower trend lines. It is over.
The final blow-off for the Nikkei and Euro stocks very likely occurred today
with exhaustion gaps to yet another multiyear high. The Euro equity finale
is contained in the third fractal of the 12/31/31 day sequence. The last 31
day sequence, which parallels US equity composites:
6/15/10 to the top(a Fibonacci number 1.6 x the base of 6) with today
day 15 of 15 for a terminal sequence of 6/15/15 days.
An averaged Fibonacci growth sequence dating from August 2004 was completed
today for the US equities at a lower short term high. Market sentiment is,
by contrarian standards, appropriately at its most optimistic apogee.
Fractally, contained within the valuation summits, the great American equity
market composites have already provided evidence of a primary decay pattern.
Expect the unexpected. Expect nonlinearity.
Post script : This piece was written prior to the US trading day on August
10, 2005. The Nikkei and SSE (China) stocks are in a blow out following a
3-4/9/6 to 6-7 daily fractal sequence.