6 December 2005
The Great Right Fractal Shoulder to the March 2000 High 
34/75/68 Weekly Pattern {X/22.5X/2X} Completed...
(And The Final Daily Fractal NonRandom
Walk To The 68TH Week Third Fractal High)
Fractal analysis is a simple process of quantitative pattern
recognition. It is true there are caricature patterns of the ideal, but the
ideal growth and decay patterns can be easily discernible within those
caricaturizations. The rhythm of fractal organization and progression
is how things work in nature. From the self organization of bacteria
through a series of smaller self replicating actions and self assembly
processes involving DNA, enzymes, proteins, lipids, and storage
carbohydrates to the formation and evolution of galaxies in the
universe to the formation of hurricanes, complex systems including the
complex moneyasset macroeconomic system progress in a self organizing
fashion and evolve in elegant repetitive fractals at larger and
smaller time scales.
Fractals are non complex. The greatest interpretation mistake appears
to be making the non complex progression more exotic and more
caricatured than need be. Nodal low points define individual fractal units and
solid interobserver agreement of those nodal points is necessary for potential
scientific validation of the macroeconomic fractal progression hypothesis.
With these straight forward concepts in mind, a revisit of the basic
fractal tenets is warranted.
From The Economic Fractalist main page: "The ideal growth fractal time
sequence is X, 2.5X, 2X and 1.51.6X. The first two cycles include a
saturation transitional point and decay process in the terminal
portion of the cycles. A sudden nonlinear drop in the last 0.5x time
period of the 2.5X is the hallmark of a second cycle and characterizes
this most recognizable cycle. After the nonlinear gap drop, the third
cycle begins. This means that the second cycle can last anywhere in
length from 2x to 2.5x. The third cycle 2X is primarily a growth cycle
with a lower saturation point and decay process followed by a higher
saturation point. The last 1.51.6X cycle is primarily a decay cycle
interrupted with a mid area growth period." (Alternatively, many of the decay
cycles have a three phase decay pattern of Y/2.5Y/2.5Y)
Now consider the weekly fractal progression of the Wilshire using low
nodal points from July 2002.
First Growth Fractal: 34 weeks (July 2002  March 2003)
Second Growth Fractal: 75 weeks (March 2003  August 2004)
Third Growth Fractal 69 weeks (August 2004 present)
Notice that for the second fractal the nonlinear break downward came
on week 74 between 2X and 2.5X (week 68 and 85) just as the ideal
fractal model predicts. The current peak of the third fractal is
exactly on week 68 or exactly 2X.
The low using the ideal model would come at 1.5 x the base of 34
weeks or at week 51 using week 68 of the third fractal as the final
(secodary to March 2000) top. This would put the low ideally in the
last week of November 2006. A possible three phase ideal decay cycle
of y/2.5y/2.5y would involve a 9/22/22 weekly progression to this late
November 2006 low. It is possible that the second 22 week fractal
might represent a low with a near retracement to this low in the late
November 2006 time frame.
The daily final fractal sequence which replicates other classic and
individual commodity tops bringing the the Wilshire to its 68 week
third fractal high began on the low nodal day of 29 April 2005 which,
as an up going trading day, was double counted and initiated a first
fractal base of 12 days.
The daily ideal fractal sequence to the top was x/2.5x/2x or 12/30/24.
The top 24th day of the third fractal became the first day of the
finale blowoff sequence with a down and up going curvolinear pattern
of 16/40/day3738 of 3240. The first 16 days were downgoing. Nodal
Highs at days 16 and 32 were made during the second fractal with a low
on day 40, October 13, 2005. Double counting October 13 as a up going
trading day began the third fractal, and the current integrative
maximal peak occurred at day 32 or on 25 November.
A decay process beginning in earnest during this current time period
would validate the simplicity and near perfection of fractal
progression of the complex economic system. Just as the bacteria and
the coalescing and forming galaxies require substrate for new growth
and progression, the complex economic system requires new credit
growth for continuation. At the greatest time dimensions, maximal
fractal growth levels represent the inflection and saturation points
where consumer debt, consumer over and forward consumption, and asset
over production saps the macroeconomy's ability for continued credit
expansion. It is at this time that the major decay cycle begins.
Gary Lammert
