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Several people have requested an update of my message regarding the 3/28
forecast date. One of the problems in posting a forecast based on Near Impulse
Theory is that most recipients will not understand the theory or how to use the
information. So to help in understanding my message, I will try to give a quick
lesson in interpreting the Near Impulse forecast. To assist in this analysis I
have attached a number of forecast figures for different time frames.
The first thing we must understand is that market trends and reversals exist
in all time frames. Gann made reference to "Wheels within Wheels", a veiled
recognition that market structure is fractal in nature with each higher level
element composed of a number of lower level elements. That being said, it must
also be recognized that trend changes of major significance always begin at the
lowest time frame. Thus a monthly reversal begins with a weekly reversal and a
weekly reversal begins with a daily reversal and so on until any reversal could
be associated with a single tick – the smallest fractal element of any
market.
Analyzing market structure and condition is very much like peeling an onion,
that is, looking at the structure layer by layer.
An important characteristic of Near Impulse Theory is that it models market
structure as a nonlinear, dynamic system. Current market structure is seen as
composed of reactions to previous structure, which can be forecast in the time
domain, and reactions to new impulses whose occurrence cannot be forecast.
Consequently the most important analysis is always that of the lowest time frame
and most recent occurrences since longer term outcomes are subject to the latest
developments as well as events and impulses that have not yet happened and
cannot be forecast.
This is in contrast to many market analyst and contributors to these boards
using static cycle, astro cycles, astrology or other disciplines who believe
that significant turning points in time and polarity can be forecast well in the
future and implying that market events are somewhat predetermined. I simply do
not believe that to be true.
The Near Impulse Forecaster turning points represent potential changes in the
psychological sentiment of different populations of market participants who
already have entered the market with an opinion of direction. Simply stated, the
theory says that these market participants will undergo a series of emotional
wave fronts in the future at which time they may alter their market opinion. The
theory assumes that these psychological highs and lows are a function of a
natural mathematical algorithm which allows us to forecast when in the future
these participants may again act in the market. We cannot, however, determine in
advance what the impact of that new action will be because it depends on new
information (impulses) that have entered the market since the last decision
point. We must therefore interpret the reaction at these wave fronts based on a
current market action and structure.
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