Elliott Wave and Harmonics

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Harmonics across Octaves

A force can create Harmonics at lower and higher Octaves of frequencies, just like the same patterns can be seen on many scales in Nature. One of the most important Laws of the Universe is the “Inverse Square Law”. Or any Force declines exponentially with its squared distance. This Law applies to all known Forces in the Universe and is responsible for the familiar spirals visible from the ultra large galaxies, down to the huge hurricanes, but also to the smallest shells.

Elliott Wave and Harmonics

Harmonics can easily be detected in the US Markets with charts of progressively larger intervals or octaves. The charts of one year, 10 years and 100 years use the power of 10 since the decennial pattern is significant enough to already be recognized as useful. Just as expected, we do see a similar repeating waveform across all three Octaves. The waveform typically shows weakness near the first and second third of the chart. This yields the familiar Elliott Wave pattern of three drives up broken by two periods of weakness across all time frames as Elliott discovered.

Dow pattern across a year

The pattern in the Dow Industrials does not show as much Spring weakness as expected, but the Dow Utilities show the pattern quite well. The Fall decline is present as expected in most charts.

Dow pattern across a Decade

As you can see, the composite data since 1897 shows weakness around the second and seventh year. This is 5 years between lows and shows a 5 year cycle harmonic as well that is probably shifted a bit into the well known 4 year Election cycle.

Dow pattern across a Century

The Dow chart of the last Century does show this pattern of weakness near the thirds with lows in 1932 and 1974 or 42 years apart which itself is between the 10th Harmonic of the 4 year Election and 5 year cycle discussed above. As is common with all patterns, they are rarely exact but give a general idea of the likely direction in the future.

Dow pattern across a Millennium

While we do not have data to easily see a pattern across a Millennium, we do have enough data to know that the South Sea Bubble occurred in the expected second third of the Millennium. The first third of the Millennium was marked by the Black Plague which decimated the economies of the world and certainly caused a drop in asset prices. Further data is difficult to come by, but the Fall of Constantinople and Spain in 717-718 certainly qualifies as a low point of the Western World.