Major Equity Indices July 2006 Returns

Sunday, August 06, 2006 | 08:57 AM

via Birinyi Associates, comes this great pictograph of the past month's performance.

Major Equity Indices July 2006 Returns

click for larger graph


Note the breadth chart at bottom.

Sunday, August 06, 2006 | 08:57 AM | Permalink | Comments (10) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Is it possible that the macroeconomy operates according to near ideal noncomplex mathematical laws? Would this really be so surprising? Mightnít one expect natural laws as part and integral to a very nonrandom process that is ultimately quantified in the integers 0 through 9?

The alcove of the Economic Fractalist has posed such a hypothesis - that the global macroeconomy with its integrative money growth, money growth cresting, and ultimately money decline, that is, its credit cycle, is exactly represented by simple quantum fractal growth and decline natural laws directly reflected in the daily and weekly and yearly trading valuations of its great composite equity, bond, and commodity markets. In a prospective fashion a mathematical x/2.5x/2.5x discontinuous fractal growth has been identified that appears to represent the limits of the global credit cycle system.

While the integrative process is a complex mixture of facilitated debt and money creation, resultant asset and commodity inflation, ultimately limited by ongoing wages, consumption saturation, and increasing debt obligations via accelerating debt instruments, e.g., ARMS -the predictable evolution of the summation quantum simple patterns strongly appear to herald major directional changes.

Such a change occurred for the Wilshire 5000, the composite US equity proxy marker, on 5 May 2006. That day represented the secondary closing high for the Wilshire after its a 142 year credit growth cycle from its predecessor stock summation proxy indicators starting in 1858 and ending in March of 2000. 5 May 2006, the secondary high to March 2000, was marked by a minutely exhaustion gap with a closing high for the last 6 years.

Now on 4 August 2006, another possible minutely high exhaustion gap high has occurred accompanied by a very curious sequential exhaustion gap to the low side - covering the same trading valuation territory - all within the same day.

The x/2.5x/2.5x extended fractal evolution from the Wilshireís lows in 2002 and 2003 to its 5 May 2006 closing high has been well described in the serial posting of EF. From the October 2005 low, the daily fractal pattern has been:

x/2.5x/2x/1.5x or 12/30/24/18 days.

Day 18 initiated a new fractal sequence with a 21-22 day base.:

21/53/53 or x/2.5x/2.5x with day 53 of the third fractal growth sequence 4 August 2006.

Interestingly day 42 - exactly 2X of the 21 day base - of the second fractal growth sequence was 5 May 2006.

Was 4 August 2006 - the final x/2.5x/2.5x extended lower high representing the second shoulder of the 5 May 2006 second shoulder to the March 2000 high?

The US ten-year note has ominously inverted below the 3-month treasury for the last two trading days. Ten-year treasuries at near 5 percent in a massive deflationary environment would seem the prudent investment - and expected natural money flow move.

As always expect the discontinuous and the nonlinear -unexpected. Lammert

Posted by: garylammert | Aug 6, 2006 10:39:44 AM

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