17 May 2005
The X/2.5X/2X Fractal Behavior During the Last Five Trading Days
While individual stocks may be subject to large daily valuation fluctuation
via institutional large block trading or very wealthy individual investor
selling or buying, an example of the latter being Mr. Kerkorianšs
acquisition of over twenty millions shares of GM with an announced intention
of buying another like number, the major indices typified by the granddaddy
of them all, the Wilshire 5000 (TMWX) with over 14 trillion dollars of
equity valuation, are not influenced by relatively small straw man money.
With the exception of the nonlinearity found often between the 2 and 2.5 X
time frame of the second growth fractal, the large indices travel by a
relatively smooth discrete fractal growth and decay. Looking back on the
fractal patterns that have transpired, everything makes sense. It is the the
looking forward on the short-term side in terms of minutes and hours and two
or three days that remains the challenge.
As a most recent example, a review of the 5 day 15 minute growth chart of
the TMWX chart is most revealing. Starting with the lowest 15 minute unit (a
reversal unit) on Wednesday May 11, 2005, a probable rolling fractal
sequence commenced with a 19 unit (15 minute) first fractal growth base. The
second growth fractal made a secondary peak at unit 38(2X) with a nonlinear
gap down during the next 10 units ending at a low of 48(2.5X). The third
growth fractal was in 15-minute units: 6-7/16/13 with yesterday (Monday May
16, 2005) ending very appropriately up at the 33rd unit of a potential
38-48(2-2.5X) third growth cycle.
On a daily unit time frame the fractal sequence has most recently been a
caricature of ideal growth fractals with the most recent daily growth
sequence 3/7/5 - and since the March 2005 secondary top: 10/23/21 of a
potentially maximum 23 or alternatively 10/22/22 of a maximum 22.
The weakness in the Italian and Belgium markets, which have failed to close
their gaps, may be prescient of the direction for the global markets. Can
credit creation exceed the contraction occurring in the hedge funds and
Evidenced need for dollars as indicated by the dollar's rise above its
multi-week trading range? The growth, decay, and inverse growth of decay
fractal patterns remain intact for a near-term nonlinear event.
Post script: The third fractal did end at a low at unit 48 with a subsequent
blow off fractal sequence ending with a double exhaustion gap on the