19 February 06
A Possible Fractal Solution for The Composite Wilshire's Right
Shoulder Initial Breakdown...
- The First Daily Decay Fractal includes Day 62 of 31/77/62 - for a
Base of 11 days....
- The 2nd Decay Fractal ...Starts with a 4/10/9 of 9-10 daily
Growth...declining to day 28....
- Proposed Primary Decay Sequence: 11/21 of 27-28/27-28 -
Replay of 1929
Growth fractlets within decay dominant patterns represent the norm for
yin-like growth in yang-like valuation destruction.
A deteriorating X/2.5X/2.5X : 4/10/9 of 9-10 daily growth fractlet
beginning the Wilshire's second decay fractal would be a most fitting
conclusion to the Wilshire secondary peak - some 1750 points shy of
its 24 March 2000 primary high. This Fractlet with a lower low ending
second fractal 4/day 10 of 10/9 (day 10 - with its prototypical
second fractal nonlinear gap lower on a minute chart)...on 7 February
is but a lperfect little fractal growth mole sitting laterally and
rightwardly to the bony most weekly prominence of the Wilshire's 2000
right shoulder. Its recent high did best day 77, but not day 62 of the
31/77/62-77 perfect terminal growth fractal.
An inversion growth fractal (growth of decay) is also discernible with
an inverted 'm' pattern of 27 days with 14 days representing each hump
of the inverted 'm' and a technician's double top ending with Friday's
lower recent high.
All of the money created via 5 years of enormous US debt expansion -
now owned by the foreign balance of payment beneficiaries; the real
estate development, construction, and entrepreneurial flipper
industry; the mortgage debt creation industry; the automobile,
educational, and vacation industries; the tort, personal injury, and
product liability industries; the health care industry; the drug
manufacturer industry; the governmental entitlement industry, and the
interconnected oil and war industries - all of that borrowed and hence
created money given to those thriving US industries which underscore
America's global fundamental economic competitiveness and contribute
so heavily to America's bottom line - has been inadequate to best the
Wilshire's 2000 high.
Smart money is flowing into long term debt instruments locking in 4.5
interest rates - with 3 month treasuries and the 30 year bond now
just a few thin hairs apart in yield. The percentage of available
reserve cash in mutual funds, cash needed to propel the Wilshire ever
higher .... is near 3.8 percent, a historical low.
the high flying commodities of the last 9 months is working its way
through the production food chain to
manufactured items located on our Walmart's shelves.
The collapse of the high tech bubble occurred in spite of a series of
rapid Fed Funds interest rate cuts by the Fed - similar to the
breakdown of the DJIA from 1929-1932 in spite of rapid interest rate
decreases. The 2000 high tech industry was overvalued, over leveraged,
and overproduced just as the DJIA was in 1929 with its high tech model
A's and radios. Will
a possible valuation decay process respond once again to a rapid
lowering of interest rates?
Will the housing bubble have a low interest rate second wind or has
the pyramid scheme ran out of entry level credit-able consumers at a
time of oversupply?