12 May 2005

(All new economic reports are sent to
The editor of URBAN SURVIVAL.COM, George Ure
for possible early posting on his eclectic
website. A slightly varied edition is posted here
8 to 24 hours later.)

Major Indices Fractals Pointing to Near Term Major Nonlinear Event

Folks would be wise to follow the fractal patterns and not the news noise.
Isnıt it interesting that stock or commodity valuations always occur in
discrete bands, groupings or fractals and that the business news like
psychology adjusts to the fractalsı actions rather than vice-versa. The oil
commodities are following very discrete saturation and decay fractals. Ever
notice how one day the supply of oil is more than expected and the next day
there is a dearth of oil. With regards to valuation of composite indices the
news is generally meaningless or at best tangential.

Oil trades according to growth saturation curves and then decays to new
selling saturation areas where smart buyers reenter the trading. With the
great recent excess in money supply created from excessive borrowing -
driven by interest rates markedly less than nominal inflation rates-
feedback inflation of commodity prices has occurred with correspondingly
higher saturation valuations. The worldıs oil will effectively run out in 15
years. Going backwards thatıs 1990 ­not too long ago. Long before oil runs
out, and even with a major recession or depression, oil prices in inflation
adjusted dollars, euros, and yen will skyrocket.

There are three types of recognizable fractals: Growth fractal, declining
decay fractals, and inverse growth of decay fractals. Ideally all three
types of fractals should converge within a few days of a final lower high
before a major nonlinear event. Such a convergence appears to be now

The decline Wilshire fractal x/2.5x/2.5x was elucidated in last weekıs
piece. Rather than the 15/37/37 day sequence it turned out to be a bit more
precise: 15/37.5/37.5. The complimentary RMS growth fractal x/2.5x/2x,
instead of the16/39/32, turned out to likewise be more precise: 16/40/32
with a three-day overlap of second and third fractals.

A probable identified terminal rolling fractal involving the January 2005
peak (whose top eight day integration valuation area was greater than the 8
day top in March) occurred in a fractal sequence of 6/14/12/9
(x/2.5x/2x/1.5x) equaling 38 days. There are three easily identifiable
fractals since the terminal low of those 38 days with today Thursday 12 May
2005, counting in as day 76 or precisely 2x of the 38-day base.

The inverse growth of the decay fractals (use the Wilshire or NASDAQ) has
evolved as 19/48/and today day 48 of 48 (x/2.5x/2.5x). Today will mark the
completion of the inverse growth fractal.

A key reversal day today or break down occurring with tomorrowıs trading and
leading to a nonlinear devaluation would provide the strongest of all
possible confirmation that market valuation activity operates by discrete
mechanistic fractal trading patterns.

G. Lammert