Wednesday, June 26, 2024

A June/July 2024 Flash Crash?

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.

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