Archive

Posts Tagged ‘Murrey Math’

Dow Jones: The Hidden Order (Part 1 of 4)

September 20, 2017 2 comments

There is a hidden order behind the seeming chaos of the markets. The Random Walk hypothesis that markets are random and cannot be predicted is willful blindness to the overwhelming evidence of order all around us. Within the markets – for our purposes within the Dow Jones Industrial Average (DJIA) – there is a pattern clearly visible once your eyes are opened. The universe is highly mathematical and surely our Creator is the Great Mathematician. He has left clues of His presence everywhere for anyone to see them plainly.

Vishnu-3-Steps

Trivikramapada (Three Steps of Vishnu), 1800s – Courtesy of The Cleveland Museum of Art

The Hindus tell the story of Vishnu measuring the universe with three steps. In our so-called modern world such things are regarded as legend or mythology, and are often dismissed out of turn. The Trinity, or tripartite nature of God, likewise, is regarded with skepticism and outright derision by some. The number three is considered a sacred number in many cultures and religions while the uniformed scoff that such beliefs are a form of primitive and uninformed numerology. Nothing could be further from the truth. In a sense, without the number three, it would be impossible to see or even conceive of the hidden order that envelopes us.

pi-1453836_1280

 Martin Armstrong, perhaps more than any person living or dead, has grasped the hidden order of the universe and given it expression through his Economic Confidence Model which is based on a deep understanding of Pi (in his model 8.6 years or 3141 days). Interestingly, our current concept of Pi is based on our decimal or base 10 system. The Sumerians used a base 60 number system and their version of Pi was 25/8 or 3.125. Some view 3.125 as an approximation or even a miscalculation of Pi. This is like saying that when a Guatemalan points at a dog and says it is a “Chucho” that they have somehow misidentified it. 3.125 is the correct number for Pi within a base 60 number system, as is the infinitely long Pi calculated in the context of the decimal system.

In many respects, base 60 and the Sumerian version of Pi, 3.125 are more elegant and more useful than the decimal version of Pi. The Sumerian version of Pi is central to T.H. Murrey’s Murrey Math and most probably Martin Armstrong’s calculations of the turn dates of the Economic Confidence Model. Murrey Math is clearly constructed around 3.125 and you can learn more about how to properly calculate Murrey Math Levels and how his system works here and here. It is Murrey Math, based on the Sumerian version of Pi, combined with a third version of Pi, that provides one of the keys to unlocking the hidden order inherent in markets.

Interestingly, most of what is needed to unlock the hidden order can be found in the number series 6, 7, 8 and 9. Summed these equal 30. Thirty is 10 (base 10) multiplied by three. Ten times six is 60 or base 60. Very simple math based on square roots, squares, addition and division would take you most of the rest of the way to being able to demonstrate for yourself, simply with pen, calculator and paper, that the market’s walk is anything but random.

phi-42610_640

One of the weaknesses with much analysis, historically, is a linear view of reality. Linear analysis tends to conclude that the events of tomorrow will largely move along the same path as those of today. Sometimes, as with climate analysis, the viewpoint is taken that the trend of today will be multiplied several fold in the future. This linear view is incorrect. Many so-called climate scientists conclude that mankind will destroy its earthly home. The Creator did not create a world, much less a universe,  that could be undone by His own creation. The Universe, whether you believe as some Hindus do, that the Creator actively intervenes to achieve balance, or whether this is accomplished through some self-correcting mechanism, seeks a proper balance. Phi, or its shorthand version of 1.618 is one numerical representation of this concept. Dividing one by 1.618 results in 0.618. One minus 0.618 = 0.382. As percentages these are 61.8% and 38.2% respectively.

The same balancing act that results in ice ages and warm periods results in periodic booms and busts in the economy and financial markets. This brings us back around to the Pi Cycles that Martin Armstrong has so expertly used to create his Economic Confidence Model, forecasting both the 1987 Stock Market Crash and the top in the Nikkei Index. Armstrong’s Pi Cycle is 3141 days or 8.6 years. 6 waves of that cycle equal 51.6 years. Six 51.6 year cycles make up 309.6 year cycles. For our purposes, the 51.6 cycle can be used in combination with Phi Ratios of 61.8% and 38.2% (these can be rounded to 62% and 38% for simplicity) to demonstrate the orderliness of the supposedly unpredictable and chaotic financial markets.

stock-exchange-738671_640

Let’s take Armstrong’s 51.6 year cycle and multiply it by the two Phi Ratios rounded – 0.62 and 0.38. So, 51.6 x 0.62 = 31.992 and 51.6 x 0.38 = 19.608. Now, using the 100 Year Historical Dow Jones chart verify for yourself the following inflation-adjusted numbers (be sure to turn off the log scale).

Starting from 2017 subtract to get the following years:

19.608 = 1997.392 – March 1997 the DJIA was near 10100 (lower)

31.992 = 1985.008 – January 1985 the DJIA was under 3000 (lower)

From 1985.008:

19.608 = 1965.4 – July 1965 the DJIA was above 6850 (higher)

31.992 = 1953.016 – January 1953 the DJIA was under 2700 (lower)

From 1953.016:

19.608 = 1933.408 – February 1933 the DJIA was a little below 1000 (lower)

31.992 = 1921.024 – March 1921 the DJIA was a little above 1000 (higher)

Projecting forward from 2017:

19.608 = 2036.608 – We would expect the inflation-adjusted DJIA to be lower than the 2017 DJIA

31.992 = 2048.992 – We would expect the inflation-adjusted DJIA to be lower than the 2017 DJIA

These numbers above are not perfect by any means. But, within about a quarter (or three month) time period there is a pattern of inflation-adjusted lows and highs that you would not expect given the very wide time periods – dates between 1921 and 2017. Clearly markets and prices do not move in a linear fashion. Instead, they move up and down in a more or less orderly fashion. Prices do not continue in one direction forever. Prices correct once they have extended to a certain limit.

Not only does the concept of balance apply to prices, but it applies equally to the time within which price movements occur. Refer again to the 100 year chart of the DJIA. The Roaring 20’s bull market lasted approximately 8 years and was followed by a 34 month decline. The late 40’s to mid-60’s bull was around 17 years. The 1980’s to 2000 bull was about 18 years in duration. Bull markets can only endure so long before they must give way to bears. Given the price expansion of the current DJIA we should probably expect the current bull, which began in 2009 (perhaps with a counter-trend bear in-between), to continue on for around 18 or 19 more years – all the way to 2028 or so. More on this later.

stock-exchange-642896_640

In the next part of our series, we’ll take a look at the Dipping Bull and when (or if) we should expect that the current raging bull market will take a breath.

 

 

Advertisements

Bitcoin Price Falls: How Low Will it Go?

September 4, 2017 Leave a comment

bitcoin-2373265_1280

After pushing to near (or above depending on your source) 5000, the Bitcoin price has begun to move substantially lower – trading below 4300 as this is being written. Many people, especially those who are new to Bitcoin and other crypto currencies, are likely worried about where the price is headed. Fortunately, this was discussed in Bitcoin: Caution Ahead published on August 31, 3017.

With the crypto world buzzing about Bitcoin approaching the 5000 level, its progress has seemed unstoppable. However, there are some signs of frothiness. In my own local community the owner of a computer networking and repair business has started giving classes on investing in Bitcoin, Ethereum and Litecoin. The locals are discussing investing in crypto currencies, wondering which ones are the best to profit from.

But, more importantly than anecdotal evidence that there may be some temporary frothiness in the market are cyclical concerns. In fact, as Bitcoin nears the 5000 to 5500 level, the risk increases that the price will dip to around the 2500 to 2700 level.

Bitcoin has already broken through the initial resistance discussed in that post.

Additional resistance can be discovered by constructing a pure base 60 grid based on the current price level of Bitcoin.

5/5 – 6703.37

4/5 – 6310.69

3/5 – 5918.02

2/5 – 5525.34

1/5 – 5132.67

0/5 – 4740

The next base 60 grid is:

5/5 – 4740

4/5 – 4462.33

3/5 – 4184.67

2/5 – 3907

1/5 – 3629.34

0/5 – 3351.68

Potential dual-support is at the 3629.34 and 3907 levels.

Barring Bitcoin blasting through the 5400 – 5500 area, the expectation is that it will slide towards to 2500 – 2700. Once near that level expect Bitcoin to rebound and start working its way toward the 10000 level.

Bonus: This isn’t why the Bitcoin price dropped:

Sorry, it’s not the China

Yes, it always seems there has to be a “reason” for price movements to happen. Price movements happen based on cycles. There are many cycles ranging from climate to war, economic to fashion. Price isn’t unpredictable and it isn’t a random walk. Yes, predicting something like will the price of Bitcoin be up or down tomorrow can be tricky. Using Probable Price Ranges (PPRs) to bracket the day’s movement is simpler and, over time, can give a good idea which direction prices are moving. I wrote my post Bitcoin: Caution Ahead saying that near 5000 Bitcoin would reverse and head to around 2500 to 2700. The Chinese Government didn’t call me on the phone to let me know they would not legalize Initial Coin Offerings (ICOs). However, understanding cycles, probable ranges and Murrey Math allowed for the creation of the Bitcoin Price Road-Map on August 13th much ahead of when China supposedly “caused” the Bitcoin price to drop.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Bitcoin: Caution Ahead

August 31, 2017 4 comments

signal-813223_1280

With the crypto world buzzing about Bitcoin approaching the 5000 level, its progress has seemed unstoppable. However, there are some signs of frothiness. In my own local community the owner of a computer networking and repair business has started giving classes on investing in Bitcoin, Ethereum and Litecoin. The locals are discussing investing in crypto currencies, wondering which ones are the best to profit from.

But, more importantly than anecdotal evidence that there may be some temporary frothiness in the market are cyclical concerns. In fact, as Bitcoin nears the 5000 to 5500 level, the risk increases that the price will dip to around the 2500 to 2700 level.

Not that you should necessarily get your crypto currency advice from Goldman Sachs but there is this:

Bitcoin is now within reach of the $4,827 near-term price target that Goldman Sachs analyst Sheba Jafari quoted to clients in a research note earlier this month. Once it hits that level, the cryptocurrency could be due for a corrective selloff, perhaps as low as $2,221, Jafari estimated.

Which conforms pretty nicely with my non-bankster analysis from the Bitcoin Price Road-map:

Given the current price trajectory of Bitcoin (and some underlying knowledge of how Murrey Math Cycles work) a target price of $5,000.00 would be well within reason.

After this, especially if you are speculating use caution as the Bitcoin Price Road-map suggests the possibility of a 50% decrease in price from $5,000 to $2,500.00.

There are two big picture variations of price levels below. The first is based on Murrey Math and its rules for constructing a price grid.

8/8 – 10000

7-8 – 8750

6/8 – 7500

5/8 – 6250

4/8 – 5000

3/8 – 3750

2/8 – 2500

1/8 – 1250

0/8 – 0

The second big picture variation is a modified Murrey Math price grid based on natural growth patterns and the base 60 rather than decimal or base 10 system.

8/8 – 10861.16

7/8 – 9503.51

6/8 – 8145.87

5/8 – 6788.22

4/8 – 5430.58

3/8 – 4072.93

2/8 – 2715.29

1/8 – 1357.64

0/8 – 0

Additional resistance can be discovered by constructing a pure base 60 grid based on the current price level of Bitcoin.

5/5 – 6703.37

4/5 – 6310.69

3/5 – 5918.02

2/5 – 5525.34

1/5 – 5132.67

0/5 – 4740

OK, that’s a lot of numbers! So, where does that get us to?

First, the long-term implication is that Bitcoin has further to go up. However, before it can move to anywhere near 10000, it is more than likely due for a sharp drop lower. If you have been “holding” Bitcoin for a long period of time, you may not be concerned. However, if you are new to Bitcoin or a speculator who has either purchased near the highs, or is considering doing so, you should proceed with caution.

The two big picture grids, combined with some knowledge of cycles and Murrey Math, can be interpreted to indicate that the 5000 to 5400 levels could bring a reversal lower. In addition, the base 60 grid points to dual-resistance forming at 5132.67 and 5525.34. So, basically, anywhere from 5000 to 5525 or so could see a reversal. Of course, the reversals could occur elsewhere or not at all. Anything is possible, but not everything is likely or probable. Somewhere near 5000 would be where the cycle would normally reverse the price trajectory downward.

traffic-lights-514932_1280

With Bitcoin taking center stage and locals taking to Facebook to ask which crypto currency is the best to turn a profit on, there is anecdotal evidence that the market has some froth. Cycle theory combined with Murrey Math is pointing to the same conclusion – as Bitcoin nears 5000 it may be wise to exercise caution and not take any undue risk or speculate with any money that you can’t afford to lose.

Update: Since writing this post Bitcoin traded above 5000, and then promptly started to see its price erode. As this update is being written (9-4-17) the Bitcoin price is below 4300. Cycle analysis would point to the price to move to near or below 2500 before it rebounds and begins a move that is expected to take Bitcoin to somewhere around 10000. Stay tuned.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

EURUSD Pushing Dual-Support

August 30, 2017 Leave a comment

dollar-bill-166309_1280

The EURUSD currency pair is currently pushing down into the 1.1887 to 1.1915 dual-support area. The current grid for the EURUSD pair looks as follows:

5/5 – 1.2000

4/5 – 1.1971

3/5 – 1.1943

2/5 – 1.1915

1/5 – 1.1887

0/5 – 1.1859

Should dual-support be lost, then watch to see if 1.1859 holds or not.

The bigger picture view of the EURUSD currency pair is:

5/5 – 1.2000

4/5 – 1.1859

3/5 – 1.1718

2/5 – 1.1578

1/5 – 1.1437

0/5 – 1.1297

Should the Euro strengthen against the U.S. Dollar then consider the following level:

5/5 – 1.2994

4/5 – 1.2795

3/5 – 1.2596

2/5 – 1.2397

1/5 – 1.2198

0/5 – 1.2

Expect resistance at the 1.2198 and 1.2397 dual-resistance level.

The current Balanced Price Range (BPR) (can change daily) for EURUSD is .7677 to 1.2346. So, contrary to some current speculation about the EURUSD moving above 1.2000 and perhaps as high as 1.2500, the high end of the pair’s BPR is currently below the dual-resistance top of 1.2397.

The DXY recently rebounded off of it’s dual-support of 92.16 to 92.44, so that would seem to run counter to the idea that EURUSD would move toward 1.2300 to 1.2500. This, of course could change, but the ingredients do not appear to be in place, technically, for that move to happen at this moment.

The Balanced Price Range (BPR) uses principles of Alan Andrews’ Action-Reaction, the concept of balance, algebra, square roots and other elements to forecast the maximum low and high price based on the current day’s closing price.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Gold Price in Three Grids

August 30, 2017 1 comment

the-fence-428562_1280

The gold price recently reacted lower after crossing in to the dual-resistance at 1319.29 to 1339.17.

But looking at the gold price, there are actually at least three useful price grids you could construct that would reveal different support and resistance levels.

The first grid would be constructed on our familiar decimal (base 10) number system and looks as follows:

8/8 – 1375

7/8 – 1359.37

6/8 – 1343.75

5/8 – 1328.12

4/8 – 1312.5

3/8 – 1296.87

2/8 – 1281.25

1/8 – 1265.62

0/8 – 1250

These levels are based on Murrey Math. At the present, price is between the 3/8 and 5/8 levels. Under Murrey Math, we should expect that while the gold price is between 1250 and 1375, that around 43% of that time would be spent between 1296.87 and 1328.12.

The 2/8 and 6/8 levels, depending on where the gold price is can act as support or resistance. 4/8 can also act as another support or resistance level. If price reaches extremes below 2/8 or above 6/8 price often returns back to those levels.

The decimal system / Murrey Math combination are something that I have been using for a while to analyze price. However, another useful way to look at price level is to use base 60 and a modified form of Murrey Math appropriate to it. There are at least two useful ways to do this.

First, you can use an idealized base 60 grid as follows:

5/5 – 1357.64

4/5 – 1341.73

3/5 – 1325.82

2/5 – 1309.92

1/5 – 1294.01

0/5 – 1278.11

In the above grid, dual-resistance is 1294.01 to 1309.92. If you have observed today’s gold price action, you might have noticed that around the 1309 level the price turned back. Given the dual-resistance between 1294.01 and 1309.92 this was not surprising.

The second grid is also base 60, but is customized based on the current gold price and looks like this:

5/5 – 1398.82

4/5 – 1378.93

3/5 – 1359.05

2/5 – 1339.17

1/5 – 1319.29

0/5 – 1299.41

Yesterday, the gold price turned lower after crossing above 1319.29 to near 1328 before ending the day at 1315. The idealized base 60 grid would not have caught that turn while the customized one did.

There are several significant points here:

  1. If you only think and do your analysis in decimal (base 10) you are going to miss many important turns because they are invisible to you;
  2. An idealized base 60 analysis will allow you to see levels and turns that base 10 won’t, but there are other turns and levels it will miss as well;
  3. A customized base 60 level constructed on current prices will reveal other important levels and turns that neither decimal (base 10) grids and analysis nor an idealized base 60 grid and analysis will catch

The number system you work with to analyze price is analogous to language. Language shapes thinking and puts a box around what your mind can think and see in many respects. Number systems do the same thing. Only viewing the world through the decimal system (base 10) limits your thinking and analysis. One way to see price movement with new eyes is to use another number system such as base 60 to reveal levels that the decimal system simply has no way to reveal.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

 

Bitcoin Price Road-map

August 13, 2017 5 comments

With Bitcoin seeming to set price records on a daily basis, you may be asking, “Can the Bitcoin price continue to rise?” The short answer is, yes. The long answer involves taking a look at the Bitcoin Price Road-map.

bitcoin-2007769_1280

The big picture Bitcoin Price Road-map is as follows (based on Murrey Math):

8/8 – 10,000.00

7/8 – 8,750.00

6/8 – 7,500.00

5/8 – 6,250.00

4/8 – 5,000.00

3/8 – 3,750.00

2/8 – 2,500.00

1/8 – 1,250.00

0/8 – 0

The “Picture-in-Picture” view of the Bitcoin Price Road-map is:

8/8 – 5,000.00

7/8 – 4843.75

6/8 – 4687.50

5/8 – 4531.25

4/8 – 4375.00

3/8 – 4213.75

2/8 – 4062.50

1/8 – 3906.25

0/8 – 3750.00

road-259815_1280

Given the current price trajectory of Bitcoin (and some underlying knowledge of how Murrey Math Cycles work) a target price of $5,000.00 would be well within reason.

After this, especially if you are speculating use caution as the Bitcoin Price Road-map suggests the possibility of a 50% decrease in price from $5,000 to $2,500.00.

Short-term, taking a look at the “Picture-in-Picture” view of the Bitcoin Price Road-map, the expectation is that price will run up to around $4,375.00 before potentially backing off to around the $4,062.50 level.

Medium-term to longer-term, once the Bitcoin price hits $2,500.00 again, then that opens the door to a move all the way up to the $10,000.00 level.

BONUS: Bitcoin Probable Price Range for 8-13-17

Bitcoin Probable Price Range Low:

3570.00

Bitcoin Probable Price Range High:

4134.38

Note: Bitcoin Probable Price Range based on data from Quandl

Update 9-13-17

One month later the Bitcoin Price, after rising to above 5000 is now close to 3850. Look for Bitcoin to work its way to the 2500 to 2700 level. It would not be out of the question, due to group psychology, for the price to even drop below this level. Cyclically, however, somewhere near 2500 would be expected.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.