...(More on the Theory and Reasoning of the Contracting Fibonacci Spiral)
My old history teacher in high school once said that "It is amazing that we
live in a period of time where access to historical records have been thoroughly
documented so that humankind can learn from mistakes of former civilizations.
Instead we as a society tend to choose the easy way out, make the same mistakes
and never learn from history". Governments throughout history have attempted
to manipulate the masses so that the upper elite can have access to greater
control. This has been done through propaganda etc. with no consideration for
the future or examination of historical consequences.
Propaganda, censored news, advertising with use of proven psychological tricks
to entice buyers to purchase their products etc. are all pushed on everyone
everyday who turns on the TV. This can create changes to subconscious behaviour
that will cause people to be pre-programmed to act. Hitler did it and governments
throughout the ages have done it...living in a time with global communication
available at the touch of a button, it is even easier to sway the masses, whether
it be to try and sell a gizmo or the evening news.
The biggest problem with our society is that media outflow is controlled by
3 major syndicates in the United States. Canada receives US, British broadcasting
and we do have our own CBC etc. But no one up here is immune to pushed views
either. Media is a tool for business and business often gets support for their
vision through a political party they financially contribute to. If by chance
a majority government forms, they can then have their decisions made without
any interference. The best sort of political environment is to have a minority
government where all interests are met somewhere in the middle.
The tail end of the last sentence is the key to success in life..."somewhere
in the middle". Moderation of everything in life is critical and when it comes
to herd mentality, this middle ground is often lost and distorted. With a herd
mentality, people tend to shift from one extreme to another, so many different
people try to gauge "the middle ground" for investing...others will then use "this
group" to form their opinions as "that group" may have a biased view for where
the middle truly lies. No one individual will get the "middle ground" quite
right without stripping the emotional aspect from their core. Unless one can
be like a Vulcan, it truly is humanly impossible to avoid this scenario. Everyone
will be feeling some emotion...the stock market is based on Greed and Fear
and an infinite combination of the two. An entire population will have individual
settings at a particular point in time for how they fall on this scale, but
as a collective, the average for where this lies is the gauge to examine. With
human behaviour, some noted cycles have been noted that indicate good times
and bad times.
Tying into cycles is very important...Tim Wood does extensive cycle analysis
as does Cliff Droke. Many think that cycles do not exist and are phooey. My
answer is that these people are closed minded and do not have a brain to rationally
think out anything. The Earth rotating the Sun as it spins once every 23:56
minutes is a cycle, the tides of the ocean are a cycle as is the circadian
rhythm found in humans. Scientists some years ago connected many probes and
examined many different regions of wave frequencies and spectrum's for potential
signals from the body. They found heartbeats, blood pressure etc. and around
6-8 other signals for cycles they did not even know existed.
Discovery is based on the art of observation and knowledge base that allows
for experimentation and trying out new ideas. This is the foundation for science
and discovery. The Contracting Fibonacci Spiral )*) is a Cycle that the broad
stock market indices have been following since 1932 is a discovery that has
yet to have intricate details worked out. Every cycle will have its own unique
rhythm...this one is Fibonacci based. When someone can crack what signal a
cycle is based upon, it becomes crystal clear. One thing about thing about
the CFS is that its roots are linked to currency manipulation which controls
everything...even how gold and other commodities will be valued in the future.
This cycle trumps all others and I invite anyone to study this and prove this
hypothesis to be wrong.
Cycles are unemotional...they follow their own rhythm unless external forces
cause them to shift or alter their pattern. Some cycles like Circadian rhythm
are genetically locked in place, much like the Earth rotating the sun and would
take a HUGE event to disrupt them. Other cycles like heart rates, blood pressure
etc. are very subject to external factors (internal changes are linked to external
changes i.e. diet, fight or flight, music). Elliott Wave analysis attempts
to unlock patterns and cycles within the stock market and track its path in
a quantitative manner...there still is a personal bias to everyone who does
this form of analysis for the most part (or any other form of technical analysis)
because everyone has an opinion. To try and remove this is nearly impossible
unless many different items distracting everyone, including others personal
opinions are blocked. This is mechanical and is very difficult to do. One way
to help cycles have a basis is to have a statistical basis to a conclusion.
Statistical analysis is one of the great mathematical discoveries and is highly
applicable in science to determine if a result is statistically significant
or an aberration. The importance of field testing results is to have a large
enough pool of data in order to have an average, or mean. From this mean one
can determine the standard error, standard deviation and %CV (covariance of
variance (standard deviation/mean*100). From this, t-tests, different forms
of ANOVA's can be compared, factorial analysis (to examine multiple factors
tested at many levels to determine responses that have interactions) etc can
be used to further support or reject a hypothesis. The above sounds complicated
and it is very complicated. The bottom line is that you need a data base in
order to have access to that information that can provide a sound statistical
basis for support or rejection of an idea.
Tim Wood originally is noted for being a DOW Theory Technician, which is based
upon key criteria to determine whether or not a bull or bear market is in force.
He integrated cycles work with a heavy statistical basis to determine when
turning points occur and if they do not, it quickly allows for an appropriate
change in an investment strategy. So, having access to data is good...the larger
the data base the higher the probability and confidence that it supports or
rejects the claim.
The Contracting Fibonacci Spiral is a time based cycle that only calls the
market tops based upon Fibonacci theory. The problem with time is that it only
moves in one direction and can never be repeated (If there are multiple realities
we are only aware of the one we are in and can not tap to see "what could have
happened if...") so unfortunately, the data base for this is rather sparse
and there are no comparators that I have really found (or had the time to examine).
We have 1966, 1987, 2000, 2008 and soon around early 2013 before the next supposed
point in time as the only available reference data. The collective of core
human emotions around late 2011 were much like that of fish head guy...going
with the societal consensus rather than backing off and looking at things from
a distance to see where things were actually heading.
All of the stochastics, Bollinger band analysis and Elliott Wave analysis
I do pointed to 2012 being a good year, but finding something like the Contracting
Fibonacci Spiral was something found outside of my normal work...it was based
upon examination of a very limited set of historical data and saw a pattern
emerge. If I was unaware of Fibonacci theory, I would not have been aware of
this pattern at all (It is important to always learn and build upon individual
knowledge base already in place).
Although the ideal world would have many other examples to aid in quantification
of this cycle, the data so far suggests it is quantifiable with the limited
data set. Human beings have one extreme problem and that is the failure to
realize that we are a part or nature rather than being unique created in the
eyes of God. Since we are derived from nature, the emotional core of human
beings has a mathematical basis, which is proven with the Contracting Fibonacci
Spiral. Some scientists recently worked out the mathematical basis for human
sight...everything has a mathematical basis, it just has to be discovered.
Knowing and accepting that human behaviour is mathematically based is profound
and could be hugely profitable.
By knowing what the bi product of the collective behaviour at a particular
point in time is, one can ignore the short-term herd mentality and focus on
what lies ahead. The collective of human behaviour, or herd mentality is very
similar to looking at the rear view mirror...it is no indication of what lies
ahead, only of what was before. This is very important to grasp because removal
of the background noise to obtain the true signal is the most important thing
to do for obtaining any sort of result, whether it is electronically based,
bias from a survey or attempting to profit from the stock market.
This turned out to be a longer piece than anticipated, but the take home message
is to be open and aware of one's surroundings and that it is the collective
behaviour that govern the path of the future, which by no surprise is linked
to past events. When the Contracting Fibonacci Spiral reaches its point of
Singularity sometime in 2020-2021, what happens after is up for discussion.
If the pattern continues to behave as anticipated, then we will have the continued
stagflationary environment (inflation and deflation existing at the same time),
not the deflationista view that Mish expresses (deflation deflation deflation)'.
After 2020-2021, we likely will experience very sharp inflation that will carry
the DOW to 200,000 as per Glenn Neely's wave count put forth in 1988 (Truly
one of the greatest market technicians of our time).
Remember, the things that I hypothesize about what will happen within this
Contracting Fibonacci Spiral are extrapolations of what has happened...each
point of the cycle will have events happen at an accelerated pace. In theory,
we should have huge market rallies followed by huge declines. Gold and silver
should rise in price and experience sharp declines, but overall put in higher
lows. Things should continue to go well until the expected dates (sorry, that
is for subscribers only) and then fall apart. Remember that 1987 was a point
on the Contracting Fibonacci Spiral...it was a very sharp and painful correction
that was brief and quickly bounced back for a continued 13 year advance until
2000. What does the early 2013 top mean?
The next top after that is in 2016 (again, I can not share this information)
so the 2013 correction will either be brief like 1987 or last longer, followed
by a rebound within this 3 year time frame. The important thing to note is
that this 3 year period will see a very sharp decline followed by a very sharp
rally. After 2016, a two year period of the same, then 1 year, one more year
and then singularity...this is when things blow up and go bad. Everyone is
talking about 2015 being the year... Martin Armstrong's work is suggestive
that 2015.75 is when things fall apart and Jim Sinclair also states this point
in time. The Contracting Fibonacci Spiral is suggestive that it will last longer
than anyone suspects. This is a higher order operative cycle that is underway
and has extremely powerful implications but what if it became derailed?
Derailment of this cycle would occur if government seized control over the
stock market and every aspect of business with control measures...this would
remove the human collective psychology from the equation and stop it in its
tracks...implications of this would be massive riots unknown to our era that
would be a deep tragedy. As stated earlier in the article, humankind tends
to take the most difficult route which is often perceived as the easy way out.
So with my understanding of humans, we are going to continue to embark on the
current path for another 8 extremely difficult years. The best thing to do
is go with the flow...don't go against the current, don't go against the wind.
The Contracting Fibonacci Spiral cycle can be used to profit and flourish or
ignored and face financial peril. Continuing to build a personal knowledge
base will keep mental acuity long into old age (look at Richard Russell) and
allow for better decisions to be made. Let the world of knowledge be your personal
lab for experimentation ...seek and ye shall find. Some topics of the article
may seem to be out of place or not have purpose, but elements of government
was required up front in the article to bring full circle to what could derail
this cycle and what drives even more so now the collective psychology of the
populous.
I really hope that tying in many different elements of this article help to
paint a picture with a higher pixel base to clearly see where I am coming from
and why I think this cycle is important. There is some personal bias in this
cycle that I will have obviously, but it will work until it doesn't work.