6 October 2005
Today's Entry into the Laboratory Notebook Investigating the Possibility That
Equity Valuation Fractal Evolution Precisely Represents Macroeconomic Activity.
Five hundred billion, 500,000,000,000. That's approximately
how much the Wilshire lost in two and one half days of trading before
Thursday's late growth fractal. The current ideal fractal devolution
involves about 66 more trading days to a low. At this pace that would
result in a negative valuation for the Wilshire - and just as
negative numbers do not exist in nature, a negative valuation,
likewise, will not occur for the Wilshire. Fractally, expect extreme
swings of up and down valuations. Those thinking of making money during
this macroeconomic catastrophe should think again. A wise government
would tax all windfall profits by 90 percent. No one should get rich
in this scenario. In the future wise governments will devise monetary
policy, interest rates, and and lending regulations to control
speculation in assets and their subsequent overvaluation.
The more specific the fractal prediction, the greater probability for
error. That the complex macroeconomic system grows and decays and
otherwise evolves according to a mathematical set of fractal patterns
appears readily observable retrospectively to anyone who cares to
studiously review the data in prior EF postings. The real task is
predicting the future pattern with a reasonable degree of clarity.
That would solidly place fractal analysis as having the properties of
a real science.
Prior postings in the Economic Fractalist show an evolution of
predictions. There are errors. These postings are like entries in an
experimental lab notebook. They will remain unaltered, available for
review. The incorrect estimations show the evolution of ongoing
fractal interpretation. As the fractal valuations evolve and present
new data (and the older patterns become more and more resounding in
their ideal quantum nature), so do the interpretations of the future
valuations evolve, gaining greater clarity.
The current interpretation as of 6 October 2005 of an ideal fractal
decay evolution for the Wilshire is as follows:
The peak secondary to March 2000 occurred on 3 August 2005. This
secondary peak occurs 147 years after the completion in 1858 of the
first major US economic grand fractal lasting about 70 years. The
second grand fractal is (will probably be)composed of two 74 year
subfractals, the first ending in 1932 and the second predicted to end
in 2006. The Wilshire is an extension of earlier exchange stock
valuation activity dating to the 18th century.
The top monthly Wilshire fractal including the March 2000 top was
27-28 months in length.
The expected 2.5x end of the fractal would be 67-70 months in length.
This agrees with the ideal end of a weekly fractal sequence
x,2.5x/2x/1.5x with an averaged base of 30 weeks (8 taken from a
declining fractal and 23 taken from a flat base; one week is
subtracted for double counting).
The ideal weekly sequence is; 30/75/60/45.
The Wilshire is currently on week 2 of the 45 week decay fractal.
The third growth fractal above composed of about 60 weeks is composed
of a 11/28/22 weeks or 59 weeks(subtract 2 for double counting). The
1.5x decay fractal of this sequence would be 18 weeks.
The daily count of the above fractal is 51-52/129-130/103-104 (x/2.5x/2x).
Remembering the integrative effect that fractals represent, decay
begins in top portion of the third subfractal or in the 103-104 day
period. Likewise by this reasoning the 103rd to104th day is not
expected to be 'the' final secondary high because of integrative
averaging and ongoing decay.
The number of days to an expected ideal low would be 1.5 times 51-52
or about 76-77.
As of 6 October 2005 the Wilshire is about day 10 of that decay
period. Thus after this week ends there will be about 65 more tradings
to a low. With trading holidays that would represent about 14 more
As mentioned in prior postings the ideal quantum decay is x/2.5x/2.5x.
This was the sequence in 1929 with a base of 11 - 11/27/27. Other
quantum decay fractals are possible such as x/2.5x/x,1.5x,1.6x,and 2x,
but the x/2.5x/2.5x fractal is the most likely. the interpretation of
future fractal evolution are very much like the solving of a simple
The best solution using the above information is a decay fractal of
nearly 21 days. The second two decay fractals are each composed of 52.
August 3 falls into the middle subfractal of 11 days of a 5/11/7 day
sequence(subtract 2 days for double counting.
Notice a slope taken at the low of the first and last day of this
nearly 21 day fractal contains all the lows of the fractal.
The second fractal sequence is 9/19/day 11 of 26-27 days for a total
of 52-53 days.
The third decay fractal would be composed of about 52 days.
The 30 or so remaining weeks (45 minus 15) after the the predicted
January 2006 low might be composed of a 5/12/10/7 inverted 'u'
shaped fractal that would serve as the beginning base for the next
growth sequence. My estimation will be that the low will be
Take this estimation like a notation in an experimental lab notebook.
It's today's best thought. It is today's best working fractal hypothesis.
Better thoughts with more ongoing data points and an ongoing review
of older information will likely occur in the following days. This is not