3 October 2005
Nonlinearity Ahead - 15 Weeks to a Significant Low
The end of the major three phase fractal growth progression since
2002-3 is near; further lateral valuation growth of up to 3-6 days is
possible. The 3 August 2005 Wilshire, will, with great probability,
not be exceeded. But there is a possibility for the Nikkei, FTSE, CAC
and DAX to retest and exceed the previous week's highs.
The maximal daily final daily fractal pattern for the NIKKEI is on day
38 of a maximal 17-18/43/38 of 43 pattern (x/2.5x/2.5x maximal
The Wilshire, FTSE, CAC, and DAX are on day 8 of a 5-6/14/8 of 10-14
day pattern. It is possible that these markets could break down before
the maximal theoretical length of their growth periods (see below), but
last three years all of the saturation third fractal growth patterns
have gone to their full 2x-2.5x length for the major equity indices.
This pattern is expected to continue.
The long term fractal pattern since October of 1998 on a monthly basis
will be completed this month: x/2.5x/2.5x or 15/37/37(October 2005 is
month 37). On a weekly basis this is 59/157/156 of 157 weeks. Since
fractal patterns represent saturation growth and decay curves,
hypothetically, had the fed maintained, until present, a fed fund rate
of 1 percent, the Wilshire's valuation may have been substantial
higher than it is now- with a parabolic growth blow-off akin to that
now occurring in the NIKKEI. Theoretical, the timing of the saturation
peak would be, nevertheless, nearly unchanged.
Fractal growth has followed a remarkable quantum x/2.5x/2x time unit
pattern for the last 36-38 months despite a series of fed increases in
fed funds interest rates. a summary review of this growth is found
Using the Wilshire: TMWX
First growth fractal (x): 22 weeks 103 days
(12 Mar 2003 -6 August 2003)
Second growth fractal (2.5x) 54-5 weeks 258 days (6 August
2003 - 13 August2004)
It may well be that these two fractals represent the composition of
the 'true' second growth fractal with an averaged calculated true
first growth fractal of 30 weeks or 144 days. A look at the Wilshire
shows a positive growth pattern prior to March 12, 2003 of 23 weeks.
It is possible that 7 additional weeks of the preceding declining
fractal of 12 weeks was averaged into that real first growth fractal.
Because fractals are an integrative process of both the preceding
decay and subsequent growth, this averaging is intuitively
The integrated growth pattern would be:
First fractal (averaged) (x) 30 weeks 144 days
Second fractal (2.5x) 75 weeks 360 days
The ideal time of the third fractal would be 2x or 288 days
The third fractal beginning in August 2004:
51-52/130/109 of a 104-130 maximum growth range or
51-52/130/104/ day 5 of a 78 day decay fractal
Friday 30 September was day 288-9 of an ideal 288 third fractal 2x pattern.
The idealized decay pattern using a 51-21 day base is about 77-78 days.
There are about 70 days left for a primary low. Interestingly this
agrees with an even longer integrated averaged fractal sequence dating
from October 1998 of a first fractal that includes fifty percent of a
preceding decaying weekly fractal of 5 weeks duration:
first weekly fractal 109.5 weeks
second fractal 259 of 275 weeks with about 16 weeks left to a low.
By using day 288 as the ideal third fractal top, using 72 days (from
September 30) to an expected low and 72 days as an expected low with
the 52/130/104/day 5 of 78 to an expected low, the first decay base
most likely started 31 August 2005. The initial decay fractal base
was 16 days. This ideally would be followed by second and third decay
fractals of 40 days for a total of 79 trading days from 22 September
2005. This is in exact agreement to a day of the major 144/360/288/72
daily fractal sequence and the final third fractal 52/130/104/78 day
sequence both which end within one day of each other.