Apophenia as an apologist for clairvoyance in the capital markets. - page 8
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Fractal chart structure analysis is technical analysis, and in order for the future performance models built to have realistic scenarios, it needs to be complemented by fundamental analysis in both economics and geopolitics.
In order to model the future dynamics of the Dow Jones stock index, it is necessary to consider the dynamics of all macroeconomic indicators.
Here are a few examples.
The US GDP deflator.
Over the last 10 years, GDP deflator values have varied between 1% and 2%.
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In accordance with the already established fractal structure in the non-linear dynamic system "GDP Deflator", a 3-segment fractal is being formed, which is marked in red on the graph and whose attractor tends towards fractal number 32 from the Niro alphabet.
The fractal marked in red on the chart began to form in the opposite direction to the formed fractal, which is marked in green.
After completion of the 3rd segment of the fractal marked in red, the downtrend will end and GDP deflator values will begin to rise within the framework of the formation of a new fractal in the opposite direction to the fractal marked in red.
USconsumer price index.
Over the past 10 years, US inflation has held steady at a level not exceeding 2.5%.
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In accordance with the already established fractal structure in a non-linear dynamic system "Consumer Price Index", the formation of a 3-segment fractal, which is marked on the previous chart with pink colour and whose attractor tends to the fractal number 32 from the alphabet Niro.
The fractal marked in pink on the chart began to form in the opposite direction to the formed fractal, which is marked in blue.
Upon completion of the 3rd segment of the fractal marked in pink, the downtrend will end and inflation will begin to rise as part of the formation of a new fractal in the opposite direction to the fractal marked in pink.
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Considering the current situation in the US economy, this scenario is more likely. Inflation values in the USA will rise within the framework of the formation of a fractal, which is marked in blue.
A measure of the ratio of GDP to the market capitalisation of companies.
In 1981, there was $2.54 of GDP per $1 of capital.
Since 1981, the indicator has been on a downward trend, showing an excess growth rate of GDP over the growth rate of market capitalisation.
In 1999, there was already 0.65 dollars of GDP per dollar of capital. From 1981 to 1999 the figure fell by almost a factor of four.
The negative trend of the indicator continues and in 2020 there is 0.57 GDP per 1 dollar of capital.
The main reason for the fall in the indicator while GDP is rising is due to speculative growth in the capitalisation of companies.
US company stocks are overvalued.
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Analysis of the fractal structure of the non-linear dynamic additive synergistic system "GDP vs MC" shows that in the time interval from 1980 to 2020, the fractal structure is formed by fractals of different order, with segments marked with different colours in the graph.
The fractal with pink segments is the first segment of a higher-order fractal, which is marked in blue. The pink fractal corresponds to fractal #21 (type 2 of type 1) from the Niro's Alphabet.
The fractal with orange segments is the third segment of a higher-order fractal, which is marked in blue. The orange fractal corresponds to fractal #33 (type 3 of type 3) from Niro's Alphabet.
The fractal with blue segments is the first segment of a higher-order fractal, which is marked in red. The blue fractal corresponds to fractal No. 21 (2nd kind of 1st type) from ABC Niro.
Taking this into account, we can say that in 2020, the fractal whose segments are marked in green on the chart has ended. Green fractal corresponds to fractal №33 (type 3) from ABC Niro.
With completion of a green fractal the 1st segment of a higher fractal, which is marked in blue.
From this data we can say that the downtrend has ended and the uptrend has begun.
The growth of the index values will occur within the formation of a new fractal, directed in the opposite direction to the fractal of green colour. This fractal is the second segment of the blue fractal.
After the completion of the second segment of the blue fractal will begin forming its third segment.
Within the formation of the third segment the dynamics of the indicator will be downward.
Completion of the third segment of the blue fractal will complete the third segment of a larger fractal, which is marked in red.
The estimated ending point is 0.5 and is in 2035.
The possible increase in values from 2020 to 2023 would then be caused by a decline in the market capitalisation of American companies.
And over the whole interval (2020, 2023) the growth of the indicator will be ensured by the fact that the rate of decline of the US stock market will greatly exceed the rate of decline of the US GDP.
The public debt-to-GDP ratio.
Since 1960, when there was $0.53 of debt per $1 of GDP, the indicator has been on a downward trend, reaching a low point in this time period in 1981, showing that there was $0.31 of debt per $1 of GDP.
From 1981 the downward trend reversed into an upward trend and an all-time high of 1.31 was reached in 2020. The figure rose by more than 20% in one year.
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The US debt has exceeded GDP by 31.18% and the fractal structure of the graph shows that this is not the last record high, as the USA will continue to use borrowed money from the rest of the world for its financial problems and not its income, spending it on its military budget, helicopter money for its population and many other things.
The ratio of US exports to imports.
This indicator complements the current account balance and shows how many times exports are greater or less than imports.
US imports exceeded exports by 1.3 times in 2020.
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The fractal structure of the graph indicates a continuation of the downward trend. In the next 2-3 years US imports will exceed exports by a factor of 1.5.
USGDP.
USGDP calculated in euro (EUR).
An analysis of the GDP trend graph, which is plotted against the values calculated in EUR, shows the presence of a fractal structure.
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Figure 290
US GDP calculated in Australian dollars (AUD).
An analysis of the GDP trend graph, which is plotted against the values calculated in GBP, shows the presence of a fractal structure.
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Figure 293