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Mr. Ingalls:
So, basically, you're saying "Forget this dismal science and go with your
gut", or are you really saying: "You're in over your head, newbie"? The
latter, I think, but since Physics was my Major, I'll address your point
anyway!
While Brownian motion is the result of purely random forces acting on small
particles, the forces impelling prices are not purely random, but, at times
can and do act in concert in response to shifts in mass psycology.
Therefore, in my humble opinion, the Ewave approach, which attempts to
predict the movements of a waveform for which no coherent mathemetical
formula can be derived through predicting the causal psycological pivot
points, is as valid an approach as any that can presently be found.
Furthermore, large magnitude convection currents (ie: hyper-liquidity) will
influence any localised, Brownian forces and sweep them along with the
general movement. Unless they're Small Cap!
I, too, have a nagging suspicion: that Chaos Theory may yet prove to have
predictive value in the analysis of complex waveforms like the Stock Mkt
and even weather patterns, which are of a complexity that makes the mkts
look like a simple integral equation.
But that's WAY over my head, so c'mon all you geniuses out there, do the
math and save this stupid Human race from its own folly!
And please pardon the arrogance of a simple Engineer labouring under the
illusion that he CAN grasp the internecine world created by beancounters
for their own glory and enrichment. After all, turnabout is fair play,
since beancounters have been telling Engineers (and every-one else) how to
do their jobs for the last few years all in the name of cost-cutting (and
sweeping inflation under the carpet). My bold contention is that these same
beancounters don't even know how to do their OWN jobs, as the coming Global
wipeout will, I have not a scintilla of doubt, convincingly demonstrate! Of
course, they'll blame it on Monica Lewinsky and the Japanese, because one
thing this whole sorry mess will prove is: beancounters NEVER learn, they
just make it up as they go along.
Sorry, faith is not mine to grant, but is to be found within yourself.
John Stevenson
Ottawa, Canada
P.S. Re: Small Caps; in the past, mkt tops have usually been preceded by a
final Small Cap rally, which I have been anticipating. But I don't think
we're going to see it this time for the simple reason that, with Dow10K in
sight, the Funds (who, let's face it, are really running this mkt) got
greedy and set their sights too high in stubbornly trying to establish a
firm foothold above 9K before starting to promote the hell out of Small
Caps. The result has been that the Blue Chips have reached an unsustainable
level and, in the face of: declining earnings, wide sector divergences,
pathetic a/d, new lows by the bushel, soaring trade deficits, inflation
rising (albeit slowly), tight labour mkts, "first tier" flight to quality,
gloom with no end in sight in Asia and now troubles in the Whitehouse, keep
slipping back to very tenuous support levels. The Funds are beginning to
resemble a one-armed plate spinner. (Get the hook and bring out the next
act!) But this is par for the course, beancounters always base their
projections on the rosiest possible scenario for the sake of their precious
stock options, don't you know. The very definition of a "perverse
incentive". What prudence! What leadership! Don't they know that if
Economic "Law" contradicts Scientific Law, then Economic "Law" MUST be in
error? Economic sophistry aside, from a scientific standpoint, this is a no
brainer! How can we grow exponentially within a closed system? We can't,
and if we continue trying, we will destroy ourselves as surely as bust
follows boom! IMAO. (In my arrogant opinion).
P.P.S. Oh yes, I think I've hit on a new indicator, it's called the KBI
(Kudlow Blink Indicator). I've noticed that the bigger the whopper Larry
Kudlow is spouting as he attempts to reduce the mkt "fundamentals" yet
again to: low inflation, low interest rates and high consumer confidence,
the more he blinks nervously. The day before the crash, the poor guy's
eyelids will be vibrating faster than an (unsold) INTEL 400 MHz chip!
P.P.P.S. So much for making nice! You can't handle the TRUTH! Eddie K. if
you wish to remove me from your fine list for Economic Heresy, please do
so.
It's been an eye-opener!
----------
> From: jtingalls@xxxxxxxx
> To: johnstev@xxxxxxxxxxxxxxxxxxx
> Subject: Re: MKT-Elliot Wave textbook case?
> Date: Wednesday, August 05, 1998 9:28 PM
>
> I have this nagging suspicion than TA reduces to no more than transient
> order inferred from what in reality is turbulent or Brownian price
> motion. Convince me I'm wrong, give me faith.
> On Wed, 5 Aug 1998 16:34:14 -0400 "John Stevenson"
> <johnstev@xxxxxxxxxxxxxxxxxxx> writes:
> >RTers:
> >I would like you all to know that I greatly value the opportunity to
> >"listen in" on the various comments and opinions expressed via the RT
> >Disscussion group. As a relative newbie to trading (I've been
> >intensely
> >observing Mkts for about 2 yrs., and actively position trading for
> >about 9
> >months), I can say that this group has been invaluable to me as a
> >"mentor"
> >(of sorts), as one of many sources of wide ranging opinion, and as an
> >encouragement to begin wading into the ocean of TA. To wit: I recently
> >began the online Elliot Wave course at EW International. It's surely
> >too
> >early yet for me to embark on my own analysis from scratch, but my
> >efforts
> >are starting to bear a little fruit, I think...when I looked at the
> >daily
> >chart for last friday, it looked to me like an example right off the
> >text
> >page of a classic 5 wave pattern, except (importantly?) the pattern
> >was
> >moving down instead of up, ie: lower lows and lower highs.
> >
> >My questions to the group are:
> >
> >1. Granted the the Ewave is fractal in nature, but is it meaningful to
> >look
> >at patterns as short as one day?
> >
> >2. If the observation is valid, could it be yet another indication
> >that the
> >fundamental psycology of the market has undergone a sea change?
> >
> >In any case, today's DJIA price action would seem to indicate that the
> >"buy
> >on the dips" crowd is conspicuously absent from the mkt. this time
> >around.
> >
> >For what it's worth, this looks, to my novice eye, like a RE-EMERGENCE
> >of a
> >lower low-lower high trend that appeared briefly in (about) 11/97 or
> >12/97
> >(I'm working from memory), which I believe has been this markets true
> >character all along. That trend has been distorted by the tsunami of
> >cash
> >we have seen in what I like to call the "Hyper-liquidity" mkt of
> >recent
> >months. Is it possible that that's where the true support is (ie:
> >~7500 and
> >not 8200 or 8500 as I've heard stated here and elsewhere)?
> >
> >Well, food for thought perhaps, but it seems to me a high probability
> >that
> >the time where pyramid shorting becomes a sensible strategy is just
> >around
> >the next corner on the DJIA. Definitely time for eyes and ears to be
> >wide
> >open, always time for caution.
> >
> >Kudos to those who called for a top in July 24-28 timeframe, looks
> >like you
> >MAY be right! Keep up the fine work, RTers, I for one need your input!
> >
> >John Stevenson
> >Ottawa, Canada
> >
> >P.S. I hereby pledge NEVER to delve into the political arena on the RT
> >Group again!
> >
> >
>
> _____________________________________________________________________
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