RE: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date, RealTraders Email List Archive

Thanks to you. Hank is pretty spotty about updating this website. I’ve had several exchanges with him on different websites we frequent. His ‘system’ is very simple from what little I see of it but it might be more than I expect. But a couple of the urgent ‘sell nows’ that one board that I frequented back in the fall were 10s on a scale of 1 to 10. What I’ve observed as his method is that a child fractal follows closely if not contiguously from the parent but at a visibly higher or lower degree of trend. Hank numbers each component wave of the parent and, when visibly discernable, fits the count to the suspected child fractal which, again, is invariably at a higher or lower degree of trend (Mandelbrott would approve). When enough replicating changes in trend of matching relative magnitude (each wave should be proportional to the fractal in which in which it occurs) have similarly occurred in the child as occurred in the parent, he infers the next child leg. Say he identifies a parent with 9 waves (he actually labels the pivot points), he then identifies at least 5 waves in the child or until he is satisfied, and then trades the next several waves of the child presuming they will replicate the parent.

My allusion to the October 2007 to March 2008 fractal versus the currently competing (completed) ‘wave 3’ fractal is that last wave 5 leg down. It just doesn’t finish correctly (“no happy ending”). I can count in the parent and the child, as you’d expect for an EW wave 1 and 3, entirely similar structure right down to wave 4 triangles in each (see my charts of the two triangles). Point ‘e’ of the two triangles are exactly (within 1 day of) an Armstrong 1.075 year apart. EXCEPT, that final wave 5 is not there and there remains time to complete it by Armstrong’s turn date of April 16. It would make a great story if it occurred…..what with Neely, Prechter and every other bear having already capitulated. If what I’m fantasizing is correct, today should have been the high and there will be some crushing bull traps at expected Fib levels on the way down to new lows for the year on April 16 or thereabouts. Time for a lithium break.

I believe I have read portions of your Impulse Theory but it’s about like me studying Neely’s stuff….just too much information. It’s easy to see the impact of ‘too much information’ when you take a look at Charles Barclays golf swing. I will revisit your methodology in the future and thanks,

Jim

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim White
Sent: Thursday, March 26, 2009 8:23 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

Of course I am quite familiar with Elliott Wave methodology but find it too unreliable as a basis for trading. It seems no two Elliotticians can ever agree on wave count.

Thank you for the Wernicki web site reference however I must take exception to his statement of being the first and only fractal forecasting firm in the world since I have been doing it since 1998. I would love to read about his approach but find no descriptive material on the web site. Are you aware of any? Perhaps I will email him.

My work and basic approach ( "A New Paradigm...") can be reviewed at my web site PivotTrader.com

My forecasting is based on my "Near ImpulseTheory" with non linear projections of impulse into the future. I have focused my efforts on creating highly reliable trading tools based on my methodology with an objective of identifying turning points within one bar of the pivot..

Thanks again for the reference - I look forward to learning more.

Jim White
Pivot Research & Trading Co.
PivotTrader.com

----- Original Message -----

From: Jim Ross

To: realtraders@xxxxxxxxxxxxxxx

Sent: Thursday, March 26, 2009 4:28 PM

Subject: RE: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

Too much typing too little proofing. See cap corrections.

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim Ross
Sent: Thursday, March 26, 2009 6:51 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: RE: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

Again, Elliott Waves are a method of identifying self similar fractals. I cannot imagine that you have not studied Elliott Waves if you’ve developed a fractal system. You could spend weeks on Elliott Wave methodology and it’s been around with R.N. Elliott first identified its ‘rules’ and Robert Prechter HAS popularized its use in the ‘70s via “Elliott Wave Principles.”

The one fractal practitioner who ‘headlines’ his work as more fractal geometry than EW and with whom I have direct familiarity is Hank Wernicki. He frequents Yelnick’s site and has a site at http://www.elliottfractals.com/. During the rapid decline period of August 2008 to November 2008, he had some fractal calls relying more upon his methodology than EW that SUCCEEDED within minutes of his prediction. They were spooky correct. Huge moves. More recently, his hand has gone cold, having called for a continuation of the downtrend about 2 weeks ago….

Market analogs are OFTEN CONSIDERED, themselves, FRACTALS. Most often they’re visual and not discovered by a system for that purpose, but many analysts follow analogs. You can’t help but read the comparison charts to prior bears, etc. Many analysts reduce their analysis to correlation statistics and keep weekly running tabs on correlation (Larry Tomlinson’s service is an example).

Again, my primary concentration (as a hobbyist and amateur) is Elliott Waves which is a system of recognizing fractal generation and execution. What might your system look like conceptually?

Jim

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim White
Sent: Thursday, March 26, 2009 6:07 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

I am familiar with Mandelbrot's work on unifractals and multifractals and other than my own non linear model and use of fractals, I was not aware of anyone else making a practical application to trading. If you could provide more detailed references as to where this approach originated and is described, I would appreciate it.

Jim

----- Original Message -----

From: Jim Ross

To: realtraders@xxxxxxxxxxxxxxx

Sent: Thursday, March 26, 2009 2:28 PM

Subject: RE: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

A self organizing geometric form. Recognizing the waves of the parent fractal and locating the initial waves of a child fractal allows you to enter a trade that anticipates the last waves of the child fractal with higher probability. Benoit Mandelbrot (Nobel mathematician), among others, claims chaos theory and non linear systems can only be anticipated via fractal geometry. Elliott Wave methodology is a method of anticipating fractal generation.

http://en.wikipedia.org/wiki/Fractal

http://www.amazon.com/Mis-behavior-Markets-Benoit-Mandelbrot/dp/0465043550

http://www.economymodels.com/factalmarkets.asp

http://www.tradingfives.com/articles/elliott-wave-fractals.html

There are hundreds of references. There are websites dedicated to fractal recognition and trading.

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim White
Sent: Thursday, March 26, 2009 4:39 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

Could you please provide the definition of the "fractal" relative to market action and a reference for its use in market analysis.

Jim White

----- Original Message -----

From: Jim Ross

To: realtraders@xxxxxxxxxxxxxxx

Sent: Thursday, March 26, 2009 10:51 AM

Subject: [RT] Fractal and Armstrong's 1.075 year cycle and April 16, 2009 PEI date

I’ve been following a fractal the move from October 11, 2007 “wave 1” to March 10, 2008 being the parent of the fractal (parent) of the wave from June 2008 to present (child) in QQQQs. If you look at the last small portion of 2008 parent fractal, you see a clear triangle and then a quick wave 5 to end that wave on March 17, 2008. Here’s the last days of the 2008 parent fractal:

Here’s the thought. If you count backwards exactly one Armstrong interval of 1.075 years (per “It’s Just Time” page 25) from today, March 26, 2009, you get February 27, 2008. That is point 4 e on the above chart. That implies Robert’s chart that calls for the following end of the child fractal is occurring today, March 26, 2009..

Now, do one more little test. I’m suggesting the mythical wave 5 ends on April 16, 2009 which is Armstrong’s PEI date. Now, subtract 1.075 years from April 16, 2009 and you get March 19, 2008. Allowing 1 day for rounding (1.075 years is 392.375 days), then you’re within 1 days of the end of the parent fractal’s wave or point 5 of 5 on the first chart.

One last thing. March 26, 2009 is a McHugh Phi change in trend date. Except for his March 13, 2009 Phi date, they have been very accurate over the course of this bear.

Just some thoughts in case it, as improbable as it is, does occur.

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