28 February 06
The Devolution Fractal Alignments of The Wilshire and Comex Gold
Today was a minor economic historical day: the 3 month and thirty
year debt instruments inverted; money poured into the thirty year note
driving the yield on the currently longest US debt instrument below
the yield of 90 day treasuries. Imagine smart money making a thirty
commitment to 4.5 yield interest rates. Teleologically, the only way
it will be a good investment is if asset valuations are diminished
above their carelessly and artificially inflated levels.
Rest assured that the 2006 primary decay fractal will,
retrospectively, make perfect sense in terms of the governing laws of
fractal macroeconomics. There will be a ordered mathematical and
fractally logical connection to the terminal day 62 and terminal week
75 of the 31/77/62: x/2.5x/2x, and the 30/75/75 week: x/2.5x/2.5x
perfect Right Shoulder growth fractals. There are several decay
possibilities - including the previously cited scenario - all of which
are non complex.
Indeed, that asset fractal evolution is non complex is perhaps the
additional fifth rule and perhaps the most important rule of
macroeconomic fractal hypothesis (see EF Update 6 Feb 2006 on 'the
laws of fractal progression'). Taken another way..the most efficient
and elegantly simple pathways for growth or destruction of asset
valuation will occur in mathematically optimal fractally-ordered
The key rule now operative is the third listed simple rule of the
asset fractal evolution hypothesis stating that the beginning of decay
cycles rest in the apogee peak of the preceding third growth cycle.
The terminal third growth cycle for the Wilshire was a 31/77/77 day
with day 77 being a lower low than day 62 which rested within the 75
week of a 30/75/75 week. Day 62 was included in the projected first
decay base of 11-12 days in a fractally reasonable 11-12/27-30/27-30
An alternative decay base would include day 77 within the initiating
decay sequence. Was day 77 a natural fractal extension of the third
fractal 2.5 x weekly growth period of the March 2000 Right Shoulder's
30/75/75 week progression. As well, a higher high was made
last week akin to the timing of the second daily fractal high in 1929.
The timing for this sequence would be 10/currently day13 of 25/25.
Interestingly this pattern has an exact fractal match with Gold on the
Comex. Just as in at the end of all major generational macroeconomic
cycles, borrowing contracts, money supply and GDP contracts, leaving
overproduced and overvalued assets with less money per asset.
Deflation of all asset classes is inevitable in the primary descent.
Yet another alluring fractal devolution order set is defined by a
7/17/11 of 17 decay progression. This set has the the very beginning
of the base as day 62. This primary decay fractal sequence would
produce a catastrophic crash over the next six trading days. While an
ultimate equity low might occur in 2015-2016, an intriguing nodal low
in the late summer, early fall of 2006 would be consistent with this
Three fractal decay possibilities - all reasonable and each with their
own special merit have began their dance. How will act 1 of 3 end?
Time.... time will tell.....