Confidence is the binding force of all transactions everywhere without exception.
It binds not only the events and structures of finance, commerce, and economics, but everything else as well.
It is the catalyst and cause of human activity.
These trios of bars are 'Outposts of Expected Price Change'. They occur at intervals of approximately 36 years. Their value lies in demonstrating the customary similarity of market-price behavior during the times of their occurrence.
They march across centuries. Before stocks existed, they occur back to 5,000 B.C., and from there out to 5,000 A.D. (Actually, they extend beyond those limits to beginning of mundane time forward to the open-ended, indeterminate future ahead. Computational resources currently limit calculated data to this 10,000-year spread--more than ample for correlation testing purposes.)
They possess high reliability, exact calculation, and continuity of effect.¹ They affect everything on planet Earth and the rest of the solar system.
The 36-year cycle has high correlation with mass psychology. Especially noticeable are skip-generational--every other generation--correlations.
It takes two generations for the human race to forget the immediacy and impact of large events. The reason for this is that at any time the total population is aged between 0 and 70 to 80 years. The aware portions of the population range from, say, 10 to 80. A large event can be anything that emotionally affects with great intensity large, aware portions of the human population. It thus takes 70 to 80 years for all of the impacted population to be dead and the emotional content of the large event 'forgotten'.
Then the time is ripe for the next big-event to make its appearance on the stage of history--complete with the follow-on events that take one to two decades to work off.
That is what is going on now with the inception and continuance of the financial panic and rolling crises aftermath. (It starts really in 2000 with the Nasdaq collapse, then rolling on through with 9/11 with its psychological aftermath, to the market peak in October 2007 and commencement of the real-estate, then commodities collapses.
The rightmost candy sticks in the chart above demarcate the continuance of the mass-crisis mentality that started in 2000. All crises are emotional phenomena. They, and the other trio sets above, express extremes of confidence or its lack, or periods of great volatility or intense bifurcation of confidence within a society and/or in the world.
Furthermore, and more important, is their regular, uncontrollable appearance on a schedule of remarkable periodicity. They are enantiodromian and epochal.
Such periods are filled with great spasms of confidence, then its lack. All wars are. Each side expects to win. That takes monumental confidence. The same goes for massive exhibitions of economic and financial optimism, a surfeit of confidence. All expect to win. We in the corrective-trios phase of consequent over-expectations now.
TABLE OF EPOCHS
Skip-Generational--70 to 72-year Intervals
Excessive Confidence or Its Lack
|
1789 |
French Revolution. |
|
1861 |
U.S. Civil War |
|
1933 |
All U.S. banks closed. Gold confiscated. |
|
2003 |
War on Terror |
Followed by 15 to 20 years of
military or social turbulence
The next set of candy-stick trios will
mark the end of the aftermath periods (one of which we are in now) when the emotions have down and positive confidence re-emerges--in preparation for the next soaring rise to great ebullience and catastrophe six decades from now. Will we be any readier than we have been during all the episodes of decades past?
Fortunately, the next episode is merely generational (36 years) and can lead to a traditional bear market in stocks and other possible social manifestations but not likely to a crisis of catastrophic dimension.
Meantime, the immediate, specific turning dates contained in the final green candy stick above emerge in the range of this Fall or next Spring.
¹ validating centuries
here
Written
6/29/2009--7/6/2009
Posted
7/6/2009 11:15 p.m. EST
data through
6/26/2009
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