Human Emotion as a Predictive Tool: Oct 18 2015

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Most traders have seen this chart, and that is because it is so true. The average market sees accumulation, 3steps/waves up into a 4th and final wave that can be small or a blow off top of a parabolic nature. This pattern is everywhere! It is everywhere because no matter how hard one tries most people get caught up in the herd and thus play out the same emotional patterns. We have covered it before as the pattern is see in stocks, tweets, biology, etc, literally everything.

 

Today we are going to see it in action in the form voting intention over the course of time. The chart below shows the rise, fall, and rise of the Liberals (Lib in Red) and the rise and fall of the New Democrats (NDP in Orange).

 

On the far right of the chart we see Liberal support in an accumulation zone. There is a triple top which breaks out to the upside into a classic 3step and blow off top pattern. The support corrects downward a slight bit, trends up for a double top and is rejected before starting a downtrend/bear market. The next few months sees the Liberal support zig zag downwards but what is amazing is that voting intention holds a perfect sloping downtrend resistance that could not be broken for months. It is during this down trend that the NDP sees its 3step and top pattern.

 

Once the NDP topped it too retraced before making a double top and then falling into a bear market. The top and bear market remarkably correspond to the breakout in Liberal support. The switching of voting intention is not remarkable, but the pattern it made is. The hard downtrend resistance (the red line) broke and the vote support went to the upside, but it also came back down 2 times to test support at the red line and it held. In other words, what was once resistance is now support. Even more remarkable the that the breakout and bottom retests made a perfect cup shape and then the handle shape followed.

 

To see an absolutely perfect cup & handle play out is just short of astonishing. This goes to show that stocks, voting intentions, and biological systems all move the same way because who we interact with them is emotional and we humans act in predictable patterns once a sequence as begun. This is the main reason why I began factoring astrology into my trading. I do not think a planet determines anything. However a planet is really easy to see/follow/map over the course of time. If a movement or conjunction of a planet often leads to the same result then I respect that pattern. I have most certainly learned more about the dynamic nature of the universe since becoming a trader than I ever did in school.

 

 

 

 

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