The 1982 -2024 German DAX 13-14/30-31 year First and Second Fractals

Within the 4-phase 267 year 1807 to 2074 US hegemonic x/2.5x/2.5x/1.5x :: 36/90/90/54 year fractal series, rests an interpolated 1982 German DAX 13-14/30-31 year series. The 30 year second fractal nonlinearity could as an incipient feature have an initial shocking flash crash (with a sharp rebound beyond the November 2024 election.

The self-assembly fractal mathematical architecture of the 23 October 2023 to 5 July 2024 x/2x :: 13(-)/25-26 week :: 60/120 day fractal series is observable. Rather than 28 October 2023, the Incipient day for the 13-/25-26 week first and second fractal series is 23 October 2023 consistent with the fractal maxim that fractal valuation growth begins in terminal fractal decay. Objectively, a 13(-)/25 week first and second fractal series can be identified from 23 October 2023 to 5 July 2024. The first 13 week fractal occurs as a 3/7/5 week fractal series(x/2-2.5x/1.6x) and the second fractal, a 5/10/12 of 12-13 week fractal series x/2x/2.4x-2.5x. Next trading week, the 23 Oct 2023 x/2x series with a base (x) of slightly less than 13 weeks will be in the window (2x to 2.5x)of 26-32 week second fractal nonlinearity.

As of 5 July 2024, a 23 October 2023 60/120 day :: x/2x first and second fractal series is observable. The terminal fractal window begins next week  between day 121 and day 150.

The Dax is at/near its March 2020 third fractal apogee with a three phase fractal growth series of 8/24/23 months as of 5 July 2023. (see below.)

The extended second fractal of 24 months or 4/9/8/6 months :: x/2-2.5x/2x/1.5x is beyond the expected 2.5x or 20 months of the 8 March 2020 base fractal because of the extraordinary QE in 2020-2021 with the Fed adding 10-11 trillion dollars to their balance sheet or a historical 30 % increase in the GDP/national debt ratio in just two years. The last 5/10/10 month third fractal takes the DAX to its July 2024 lower high with a potential high next week completing a 4/10/6-10 day:: x/2.5x/1.5-2.5x 3-phase growth fractal series.(see the final green/yellow/orange 4/10/4 of 4-10 day growth series above).

For the SPX Friday 28 June 2024 meets the criteria for a peak (bearish) Key Reversal Day:
‘Key Reversal Day: In a bearish key reversal the market OPENS above the prior close, often leaving a gap, sets a new high, and then closes the day lower than the prior day’s close.’

A two day chart from 27 and 28 June 2024 is shown for the SPX below.

28 June 2024 for the SPX represents year 31 of a 13/31-33 year 1982 first and second fractal series. As an update from the second picture below 28 June represents the 121 quarter of a 49-50/123-125 quarter first and second fractal series

For the SPX 28 June 2024 represents day 114 of a 55/112-140 day 27 October 2023 first and second fractal series. The SPX is in the terminal 2x to 2.5x portion of the 112-140 second fractal window where nonlinear occurs.

US total market cap to GDP ratio was at 193.3 % on 27 June 2024, still more than 6% below its 2021 199.5% peak.

Second Fractal Nonlinearity:

From the 2005 website page of TEF regarding first and second fractals (cycles) of a 4 phase fractal (cycle) (x/2x-2.5x/2x(to 2.5x)/1.5-1.6x series.

…. “The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle (fractal)and characterizes this most recognizable (fractal) cycle.”

Second Fractal Nonlinearity

Why did significant one day crashes occur on 19 Oct 1987 and on 6 May 2010? What news precipitated these events? The explanation of Fractal Macroeconomics is that both occurred in the terminal 2x to 2.5x window of second fractals, when nonlinear price devaluations can occur in saturated oversold markets. 1929 to 1932 occurred at the end of a US hegemonic 90 year second fractal occurring as a 36/90 year series starting in 1807.

Currently, this is year 31 of a 13/31-33 year 1982 first and second fractal series and day 113-114 (for the SPX and DAX respectively) of a 56/112-140 day October 2023 first and second fractal series. The system is in the terminal 2x to 2.5x second fractal windows. For the Wilshire 25 June 2024 did not exceed its 18 June 2024 nominal peak but did serve as a secondary near peak valuation of a 8/24/22 month fractal growth series from the March 2020 low.

The asset debt system is in the 2x to 2.5x time window of both the 1982 and Oct 2023 second fractal nonlinearity.

Will there be an incipient (and AI propelled) flash crash?

US total market cap to GDP ratio was at 192.2 % on 24 June 2024, still 7% below its 2021 199.5% peak.

Since 2020 profoundly and historically aberrationally high deficit borrowing and spending (as a % of GDP) by central banks, governmental, and private sources – has produced relatively so little GDP.

Expect the unexpected.