Anyone who has studied economic cycles in any depth will have encountered
the frustration of applying the concept of traditional periodic
cycles to unravel the cycles of the past and project them into the future.
Such traditional cycle analyses(like Fourier/spectral analyses) can
shed some light on the characteristics of economic and market behaviour,
but that light usually confirms that regular periodic cycles
wax and wane in strength with time, but more importantly that they invert
just when you're ready to believe in them! Traditional thinkers (who have
remembered too many of the rules they learned at school) usually use this
as the reason to assure their colleagues that anyone who believes that
any market is ultimately predictable is a lunatic. Some even
go so far as to believe that market behaviour is a random phenomenon!
They are blind to the elegant geometry that unites all market behaviour
whether it be a commodity, like Pork Bellies, or an index, like the DJIA
or the Australian All Ordinaries Index.
that unites the time-price behaviour of the markets is linked to the relationships
which describe the behaviour of atomic structure of matter, the growth
of living cells and the clockwork mechanism of the universe
of which we are an integral part. History has often confirmed that "the
answer is simple", though the pathways to any profound answer
involve complex investigation, freedom of thought and a touch of inspiration.
E = mc2 surely is a beautiful
example of a simple equation which describes a complex but universal concept.
The markets of the world are affected by many complex fundamental factors...
are they governed by a simple set of relationships? I believe they are.