Sunday, March 14, 2010

Happy Pi Day, Beware the Ides, Et tu, Brute?... tis sinusoidal time






'Pi Day is celebrated by math enthusiasts around the world on March 14th.
With the use of computers, Pi has been calculated to over 1 trillion digits past the decimal. Pi is an irrational and transcendental number meaning it will continue infinitely without repeating
.'
- piday.org

'Nitpickers please note that originally the Ides of March was not necessarily March 15th but rather the period March 13th to 17th. Later…..Roman calendar makers would save on tablets and papyrus by designating the Ides to occur on the 15th of March, May, July and October. In other months, it was the 13th.'
-Art Cashin

'Gann advised analysts to keep track of the strongest harmonies of the solar fundamental both from the zero point of the vernal equinox and from the zero point of each major pivot, explaining the subject in visual terms by reference to the geometry of the circle. He perhaps left it for his more sophisticated readers to conclude that the division of time periods and price movements into eights in fact related to the properties of the musical octave, to the properties of sound. The same may be said of the importance he attached to the seventh unit of a series, in that it can be held to represent the final tone of a given octave.'
-Alexander Goulden

'The two days on either side of the new lunar month represent most of the positive returns on equity markets for the next four weeks.'
- Macquarie Securities

'We find strong empirical support in favor of a geomagnetic–storm effect in stock returns after controlling for market seasonals and other environmental and behavioral factors. Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all US stock market indices. {There is} evidence of substantially higher returns around the world during periods of quiet geomagnetic activity.'
-Federal Reserve Bank of Atlanta

'It has been found in a great number of tests that the mean motion of the sun is the correct motion to be observed.'
- Sepharial

The Holy Bible is 'The Book of Books.'
-W.D. Gann

'Robert was a great believer in Astrology because he had found this great science referred to so many times in the Holy Bible. He had made notes as he read the Bible at different times where it referred to Astrology or the signs in the heavens and was thoroughly convinced that the influence of the heavenly bodies govern our lives. Robert knew that the Bible was replete with references that the heavens ruled. He had read where it said: 'Discern the end from the beginning, where Jesus said, "I will judge you in the place of your nativity.'
-W.D. Gann, Tunnel Through the Air

'With a boulder on my shoulder, feelin' kinda older,
I tripped the merry-go-round
With this very unpleasin', sneezin' and wheezin,
the calliope crashed to the ground
Blinded by the light, wrapped up like a deuce, another runner in the night
Blinded by the light
Mama always told me not to look into the eye's of the sun
But mama, that's where the fun is
'
-Manfred Mann

WSJ
By Eleanor Laise
March 13, 2010

Mr. Sornette, 52 years old, is the director of the Financial Crisis Observatory at the Swiss Federal Institute of Technology in Zurich, or as he calls it, "the MIT of Europe." Late last year, he launched the bubble experiment by identifying four developing bubbles and forecasting when they'll peak.

His predictions are locked away in encrypted files that can't be altered, to be revealed only when the forecasted bubble peaks have passed, on May 1.

Mr. Sornette says that his observatory can track tens of thousands of stocks, bonds, and other securities. The term "observatory" is also meant to underscore his scientific, quantitative approach to studying bubbles.

Mr. Sornette works with a handful of postdoctoral fellows and senior researchers, sifting through data on an institute supercomputer called "Brutus."

Nassim Taleb, who popularized the term "black swan" to describe extreme events that are highly unpredictable, is well acquainted with Mr. Sornette's work but still doesn't believe that any models can be used to make precise predictions. However, he says that Mr. Sornette's work, which is rooted in disciplines distinct from traditional economic models, "is vastly more useful to me than anything else in economic.

With a Ph.D. in physical sciences, Mr. Sornette worked on methods to predict the rupture of pressure tanks on European Ariane rockets in the early 1990s. He realized that the tanks didn't just rupture without warning. Mr. Sornette was able to identify patterns in acoustic emissions, which are waves produced by stressed materials, that had some predictive power.

Realizing that financial crashes are somewhat like market "ruptures," he became interested in studying market fluctuations. "It was an act of faith" to apply the type of work he was doing on the rockets' tanks to the markets, he says. "You make this stupid analogy, which can sometimes be very productive."

AM here : The productivity of stupid analogies? Roger that.

Over the weekend had the pleasure of an extended conversation with a nationally known smartypants. Suggested to him that if someone had, a couple years ago, told me that one could glean understanding of the markets through the knowledge of the Bible, a guitar, and a sailboat, I would have had a less than cordial retort.

His reply? 'I figured that out early on.'

Lucky him... although have always believed that when the student is ready the teacher will arrive did not expect the coursework to be so challenging... truth would appear to be dynamic not linear and it is a process of unlearning.

To believe that the 'natural law' guides both the flower and the star system, to reconcile that with the bloodied determinism of an entrepreneurial Irishman, is to embrace a thesis that is antithetical.

And yet...

Sacred geometry and fourth dimensional constructs of the markets seem a bit wild until one considers that it was Einstein that postulated the concept of a single spacetime continuum. Einstein's special relativity treats space and time as components of a four-dimensional manifold.

In the Old Testament time was traditionally regarded as a medium for the passage of predestined events. For Einstein, the past is a set of events that can send light signals to the observer, and the future is a set of events to which the observer can send light signals. Light is a wave and a particle.

And fourth dimensional market math? The fourth degree being an angle? What's the big deal with only 4 dimensions when string theory and M theory predict that physical space in general has in fact 10 and 11 dimensions respectively.

Wack-a-doodle-doo.

So let's revisit Professor's Sornette's epiphany again : 'You make this stupid analogy, which can sometimes be very productive', and let's try to get a little stupid...

Previous postings on this blog have suggested what reverence your blogger holds for the Fractal Man, Professor Mandelbrot. Fractals are objects or quantities that display self-similarity ON ALL SCALES.

It stands to reason then that glimpses of the 'natural law' can then be discerned by observing with one's senses this 'self-similarity'.

Or to quote Ian Fleming, 'Once is happenstance. twice is coincidence. Three times is enemy action.'

Several postings on this blog have examined such 'coincidences' ... here is another:

John Needham's Danielcode theory suggests that fast markets often retrace 29.7%. Now that's certainly an outlier proposition, and if shown empirically would suggest it is not the tail waggin' the dog i.e., working because folks believe it works.

Although the longitudinal data set in support of this retracement is being developed let us suggest it as a theory and see if perhaps there is any fractal or 'self-similarity' existing for this unremarkable 29.7.

29.7 is the orbit of Saturn in earth years. Saturn (referred to by the Ancients as Cronus or Kronos) was the Roman Deity of Time. This is where the term chronology comes from.

The synodial month, the average length of a month, is 29.7.

1335, blessed time in the book of Daniel, when divided by 45 (where 45 is 1/8th of a circle or 45 degrees) is 29.7.

One of Dewey's most common cycles is 2.96 years. Interchangeable per the fungibility of the decimal point in sacred geometry.

The frequency ratio of A as you ascend by a perfect fifth is 27/8 the inverse ratio of 8/27 (29.63%). Frequency has an inverse relationship to the concept of wavelength.

The orbital velocity of Mercury (in astro terms the communicator and trickster, e.g. 'retracement in fast markets') is 29.7 miles per second.

The nearest distance of the elliptical orbit of Pluto to the sun is 29.7 AU.

Do these coincidences mean anything? Maybe not. But consider this. For the majority of market participants, random walk is the holy grail. But this Gospel suggests that the probability of the market movements that have occurred in recent memory, and the movements your humble blogger expects to see in the future, come in at a modest, oh let's see... fingers and toes ... gazillion squared.

Maybe our dearly held assumptions are wrong.

Maybe reality is the tail risk.

Think outside the cave.

6 comments:

mark salerno said...

Dear AM,as a new reader of this blog,I am deeply impressed.A while back,you did a post on Pythagoras and charting.Sir,could you please let me know what books,or teachers,I can seek out to learn all there is to know about this subject?Thank you.

Anonymous Monetarist said...

The imagined conversation with Pythagoras was a 'flight of fancy' on Pythagoras. It was written prior to my reading a book by Bradley Cowan called 'Four Dimensional Stock Market Structures and Cycles' but was partially inspired by a brief understanding as to the subject matter he writes about. Much of Cowan's writings are a derivative of Jerome Baumring as confirmed by a friend who was a classmate of Cowan's at the Baumring lectures.

Now a lot of this can be discerned at sacredscience.com however I would recommend that the first book you read is Benoit Mandelbrot's , the Misbehavior of Markets: A fractal View of Financial Turbulence..

If you dump random-walk and embrace fractals then in order to discern the natural law that guides both man and the data-set of man, the markets, one need only observe with one's senses where 'self-similarity' occurs...

Or to quote Ian Fleming, 'Once is happenstance. twice is coincidence. Three times is enemy action.'

Here's a taste of Mandelbrot: 'Price changes are not independent of each other.My heresy is a different, fractal kind of statistical relationship, a "long memory." Why this should be is not certain; but one can speculate. Whatever the explanation, we can confirm the phenomenon exists- and it contradicts the random-walk model. Contrary to orthodoxy, price changes are very far from following the bell curve. Such theory predicts that index swings of more than 7 percent should come once every 300,000 years; in fact, the twentieth century saw forty-eight such days. Truly, a calamitous era that insists on flaunting all predictions. Or perhaps, our assumptions are wrong.'

Some of the, per the Googlebot, 'original catchphrases' populating this site such as: 'History rhymes and in complex systems patterns repeat.'; 'to be mindful is a discontinuous process'; and,'reality is the tail risk'; are nothing more than your humble raconteur speaking in the language of Mandelbrot.

In the Parthenon of the Gods of Finance, BenoƮt B. Mandelbrot should be cast on the throne. Taleb is an amuse bouse, Mandelbrot is a five star feast. When he was a pup he was tutored by his uncle who saw rote learning as an anathema. At the age of 20 he found himself hiding in Lyon, France(1944) staring at an instructor who was expounding on algebra. The words and numbers meaning nothing to him, he boldly declared, "Sir, you don't need to make any calculations. The answer is obvious."

As further described in the book The Misbehavior of Markets:

'He{Mandelbrot} described a geometrical approach that yielded a fast, simple solution. Where others would have used a formula, he saw a picture. The teacher skeptical at first, checked: Correct. And Mandelbrot kept doing the same thing, in problem after problem, in class after class. As he relates it, 'It happened so fast I was not conscious of it. I would say to myself: This construction is ugly, let's make it nicer. Let's make it symmetrical. Let's project it. Let's embed it. And all that, I could see in perfect 3-D vision. Lines, planes, complicated shapes.'

Thinking in shapes, just like Einstein. Time and space/price and form .... oh my!

Anonymous said...

Thank you,AM,for the information.Much appreciated.I hope I may ask a couple of other questions,and then I promise to sit quietly and absorb your truly great essays,as a lowly lizard is content to bask in the radiance of the sun.I have been researching Gann,trying to winnow the truth out from the astonishing chaff -heap of carnival barker Gann system salesmen.What is the truth?Was Gann also just a system salesman,as his son claimed?Is it true he never made much from his esoteric trading,certainly not the tens of millions some claim he did?Second question-is John Needham and the Danielcode the best research group using ancient mathematics?There are so many,all claiming to have found the ultimateGann,post-gann,pre-gann trading secret.Last question- regarding the Pythagoras lines and vectors,could you please recommend a clear work that covers these?The closest I have found is Don Hall's Pyrapoint and Ensign software.Were it not for the patience and kindliness of Mr.Land,my high school Geometry teacher,I would have assumed you were discussing an order of snakes.Thank you.Mark.

Anonymous Monetarist said...

(Seems like blogger is having trouble allowing comments to be posted ... let's see if this works...-AM)

Thank you,AM,for the information.Much appreciated.I hope I may ask a couple of other questions,and then I promise to sit quietly and absorb your truly great essays,as a lowly lizard is content to bask in the radiance of the sun.I have been researching Gann,trying to winnow the truth out from the astonishing chaff -heap of carnival barker Gann system salesmen.What is the truth?Was Gann also just a system salesman,as his son claimed?Is it true he never made much from his esoteric trading,certainly not the tens of millions some claim he did?Second question-is John Needham and the Danielcode the best research group using ancient mathematics?There are so many,all claiming to have found the ultimateGann,post-gann,pre-gann trading secret.Last question- regarding the Pythagoras lines and vectors,could you please recommend a clear work that covers these?The closest I have found is Don Hall's Pyrapoint and Ensign software.Were it not for the patience and kindliness of Mr.Land,my high school Geometry teacher,I would have assumed you were discussing an order of snakes.Thank you.Mark.

Anonymous Monetarist said...

Mark,

No reason to sit quietly!

Q: Was Gann also just a system salesman,as his son claimed?

A: Yes, he was in it to make a buck but that neither confirms nor negates his theories.

Q: Is it true he never made much from his esoteric trading,certainly not the tens of millions some claim he did?

A: Do not know. Have probably come across the same accounts as you have. Mu gut is he didn't die rich, but who knows how much he blew along the way :)

Q: Second question-is John Needham and the Danielcode the best research group using ancient mathematics?

A: A preponderance of evidence so far suggests that the answer is yes. Ancient meets the Moderns. There is an 'exactness' to his approach that surpasses,at least for your humble blogger, the confirmation bias that seems to plague a lot of Gann, Elliot, DeMark, astroharmonic, numerological & cosmological approaches. My gut thus far is that everyone is chasing the same fractal structure which I think is best summed up by (although was not as cognizant of the full scope of this epigram when I inked it) the following :'To be mindful is a discontinuous process, our senses allow us a glimpse at the perfect form (truth) but that view can often be distorted by the flickering fire of perception that illuminates the shapes we perceive to believe.'

Q: Last question- regarding the Pythagoras lines and vectors,could you please recommend a clear work that covers these?

A: Mentioned in an earlier reply that the imagined conversation with Pythagoras was a 'flight of fancy' on Pythagoras. It was written prior to my reading a book by Bradley Cowan called 'Four Dimensional Stock Market Structures and Cycles' but was partially inspired by a brief understanding as to the subject matter he writes about.
Cowan's book is the only one I've seen but he drifts off into planetary harmonics... Also you can google search 'Cosmic Spirograph' on this blog for a bit more regarding a book being translated to English this summer. Also review the post immediately following the CS one referenced.

Mark, don't be daunted by the material on this blog. Realize that I'm an irascible Irishmen who like many of my fore bearers punches above his weight. It is the empirical method, to advance a theory and then to try and disprove it. If you can't then you must believe what your eyes see even if it feels uncomfortable and is antithetical to those truths you once held dear.

Believe you can and you will. Please let me know what your quest brings to you and remember when the student is ready the teacher will appear.

Good luck!

Think outside the cave!

Anonymous Monetarist said...

Add-on,

There is a another book that addresses Pythagorean Time Harmonics called 'Behind the Veil' By Alexander Goulden.

Kind of Whack-a-doodle-doo and pricey for the layman ... about $3500 if I recall.

'The proposition that our Universe is a holographic construct implies that correspondences exist between all phenomena' ??

Its' brain-cap poppin' stuff.

At some point the fella will go live with his website CosmoEconomics.com.