
8 March 06 A Rare Ironclad Prediction Using Fractal Analysis An ironclad ... ironclad.. short term prediction about the near term directional behavior of US equities... can be made ... using the principles of fractal growth and decay analysis. Readers and the scientific community can realize the power and simplicity of fractal analysis as a predictive tool. Is the macro economy at the brink of collapse? Most linearly thinking economists do not believe so. The renown Economist Irving Fisher made his linear prediction of continued growth a month or so before the 1929 primary decay. The signs of early macroeconomic decay were present in the summer of 1929 with falling auto sales and falling exports. The debt burden and forward consumption on credit of American workers at the end of the Roaring twenties weighed against continued growth. March 2006 parallels the macroeconomic conditions of 1929. The unchanged linear thought processes of current renown economists are following the same 77 year old echoes of their predecessors. The nonlinearity characterized by fractal progression remains in the darkness of the ante room, just out of sight. The parallels are there. The current US economy is maintained on a termite infested wooden foundation of gargantuan debt. The listed ongoing valuation of assets are only as good as the continuation of the promised IOU's of a new service worker class, whose jobs are as tenuous as the economy they exist in. Anyone who can not conceive of a coupled feedback unraveling of jobs and asset valuations, would do well to study the devolution process in the early 1930's. Is the global economy at that critical point? While no one really knows and time will tell its story, long term fractal analysis suggests that to be the case. Nevertheless.. in the short term... an ironclad prediction can be made for the next two trading weeks, using the principles of fractal analysis. An exquisite evolving and interlocking fractal series and sub series has two interlocking second fractal growth series ending within two days of each other. Second growth fractals, as you know and have witnessed repetitively, end with nonlinear gap drops to lower valuations. While this fractal pattern can be seen in the Wilshire, the NYSE which makes its trading debut today, as a trading index, illustrates the perfect pattern. This is well worth the time to go to BIG CHART's and do the daily count.... The first fractal series begins 20 October 2005 and ends on 30 November/1 December 2005 First fractal = X = 6/15/1011 days y/2.5y/1.6y/ or for a base of 2930 days. The expected end for the second growth fractal is 2.5x or 7375 days with A nonlinear drop between day 5960 to day 75. Notice day 30 and day 60 , X and 2X, of the potential 75 day second fractal sequence are exact highs. The first sub fractal of the second fractal starts on 30 November 2005 and is a x/2.5x/2.5x rolling fractal 4/10/10 with a base length of 22 days ending on 30 December 2005. The expected end of its Second sub fractal growth period is 2.5 x 22 = day 55 with a nonlinear drop between day 44 and 55. Notice that 22 + 55 = 76 (Subtract one day for double counting) Also note that day 22 and day 43, x and 2x, represents the highs of the 22 day base sub fractal's second growth fractal. The end of both fractal series end within two days of each other, and both has an expected nonlinear drop. The first fractal series count is 30/67 of 75 for 8 more trading days and the second sub cycle series making up the second fractal of larger series is: 22/46 of 55 for 9 more days. An fractal ironclad prediction can be made for a nonlinear drop, with an opening trading day gap lower the previous day's close which will occur within the next 89 trading days. A subsequent failure to close this gap would provide technical confirmation that the great devolution of debt and asset implosion has commenced consistent with the recurrent theme of maximal X/2.5X/2.5X fractal growth progression seen in March 2000 technical Right Shoulder. Gary Lammert 