4 December 2005
Completion of the 56/140/140 day Growth Fractal
On Friday 2 December the Nikkei had a remarkable exhaustion gap of of
over 100 points completing a possible maximal terminal growth pattern
of 5/13/12-13 days. The Japanese government continues to support bad
real estate and bank debt dating some 15-17 years before with the
largest percentage federal debt to GDP ratio of any of industrialized
The Korean, Brazilian, German, and French composite indices all had
exhaustion gaps to new multiyearly highs.
A maximal equity valuation growth fractal for the US composite
Wilshire of x/2.5x/2.5x dating back to August 2004 of 56/140/140 days
was completed last week with day 140 sitting at the base of a cup of 5
to 9 tradings days with the completion of a 5 day cup on last Friday
and the possible extension until Monday or Tuesday of the this week
for the possible 7 or 9 day cup respectively.
Further support for the 56 day vice 52 day base of the 56/140/140 is
given by review of the composite US Bank proxy $BKX which shows
clearly a nodal sequence of 56 days beginning in August 2004. A low
nodal point on day 140 of the second growth fractal is is easily
discernible for the NYSE composite.
The final daily growth fractal sequence of the last several weeks is
best illustrated using the NYSE composite which shows a very elegant
x/2.5x/2-2.5x daily growth sequence of 6/15/12 of 12-15 days. Day 12
for the NYSE and Wilshire have relatively underperformed the gapping
exclamation points of the Nikkei and other sited foreign indices. This
terminal daily growth sequence for the US indices has taken the longer
pattern up to day 140 which is the 10th day of last 12 days of the
current 6/15/12 of 12-15 growth fractal.
Interestingly contained within the second and third 140 day sequences
of the 56/140/140
pattern are identical nodal subfractals of 31 and 77 days, i.e.,
y/2.5y. The pattern for the second 140 day fractal is 31/77/34 and
the pattern to the top of the third 140 fractal is 31/77/31of
currently 36 with day 34 or 140 sitting a the base of a cup ranging
from day 30 to 38, 31 to 37 or 32 to 36.
Ideal decay patterns of 6/15/15; 7/17/17; 8/20/20 and 9/22/22 are
possible with day 140 involved in the base sequence.
Will the debt laden credit cards of the American consumer be able to
once again do what American manufacturing through reasonably paid blue
collar jobs cannot, provide buying power to sustain retailer viability
and economic growth? Has the Christmas rally completed its maximal
growth sequence a few weeks early? Time will tell