Saturday, January 26, 2008

Decay model E Modified :: x/2.5x/2x/1.6x and y/2y/2y

Another 0.25 to 0.75 interbank interest rate cut is expected on Wednesday January 30. This will accompany cuts of 0.5, 0.25, 0.25, and the emergency cut of 0.75 on 18 September, 31 October, 11 December 07, and 22 January 08 respectively. The yield for the ten year note dropped from 4.3 percent on 25 December to 3.3 percent on 23 January. For the same dates treasuries dropped from 3.3 to 1.9 percent. For the Wilshire starting from its 16 August lows, a Lammert four phase 17-18/44/34-35/28 :: x/2.5x/2x/1.6x day growth and decay fractal appears operative. From 27 December a 6/12-13/12-13 day :: y/2y/2y decay fractal is discernible not only for the Wilshire, but additionally for the FTSE, for the DAX, for the CAC, and for the NIKKEI composite indices with 28 January day 4-5 of a 6/12-13/4-5 of 12-13 day potential y/2y/2y decay fractal sequence. Fourth fractal Day 28 of the 4 phase Lammert fractal series and third fractal day12 of the three phase decay fractal series occur on the same day: 6 February 2008. If this quantum fractal model is correct and there are no trading halts, 6 February 2008 would represent an ideal low with expected nonlinear collapse within the next 8 trading days. The world composite equities are sharing the umbrella influence of a contracting world money supply - contracting under the triple saturation of US consumer asset acquisition, US consumer debt, and global asset overvaluation - all three caused primarily by lending parameters and as well by inadequately-high, non inflation controlling interest rates. From its twenty seven year lows gold is following a 17/34/33 of 33-34 x/2x/2x month growth fractal. From its 16 August 2007 low, gold has made a near perfect Lammert 4 phase fractal sequence of 11/28/22/18 days with the characteristic nonlinear drop in the terminal position of the second growth fractal. In the final 18 days of the final decay fractal, a terminal 9 day base formed serving as a new base with a 9/21-25/14 - 18 of 14 - 21 day growth fractal sequence with a blow off commencing in the early phases of the second fractal. This could be as simple as a 9/21/18 of 18 -21 x/2.5x/2.5x day sequence with day 18 of the third fractal having an opening gap rising to a new US nominal high at 925 US dollars and ending on the low of the day. What are the effects of a 1-1.5 per cent interest rate cut within a two week period? Can the Fed and Congress alter the controlling invisible forces governing the macroeconomy and hence the ideal quantum fractal patterns through historical radical interest rate cuts, 800 US dollar tax rebates, and subprime repayment moratoriums and modifications? The next 8 trading days will provide the answer.

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