Feb

19

All living things are made up of the repetition of simple parts — leaves on a plant, scales on a fish, and vertebrae on humans. Biologists have found that the simpler the organism, the greater this repetition. They've found it in everything from molecules to crocodiles. Theories of where repetition is most prevalent have been formulated with a good summary from Darwin being, "The repetition of similar segments in the spinal column and of similar elements in a vertebral segment is analogous to the repetition of similar crystals." After a visit to the University of Colorado Natural History Museum where much work on the repetition of parts in molecules is displayed, I thought I should see whether there is a repetition of parts in that very living thing we deal with every day, the stock market. To study it, I took a very simple move in the first half hour of day, of an absolute value of greater than or equal to 1 but less than or equal to 2, and looked to see whether there was any evidence of repetition of this simple pattern throughout the day. I examined exactly the last 2500 days.

Thus, another great hypothesis is refuted by the facts. The polarizing force if anything is greater than the similarity force for small moves defined in this way.


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  1. douglas roberts dimick on February 19, 2009 1:38 am

     Is not the polarity (+/-) itself the repetitive dynamic of nature so found in any market ecology? Quantitative Relativity indicates that one’s attempt to so quantify, such as systemic repetition(s) of price action, would be rules-based determinative. Analogizing “repetition of simple parts” to cellular structures is relative to ecometrics a la physics and geometrics; therefore, statistical population of 2500 days with a 1-2 deviation (?) during 30 minutes may or may not equate to corresponding polarizing force(s) that are (non)correlating with similarity force(s). Output would determined by defined state-input-state parameters, yes? Given the article is merely a reflection and the example is simple for purposes of a musing, my comment here only notes the inductive process by which new information is being sought… Is not that process (as the stated formulation to quantify the implied hypothesis) exactly what markets are in part designed to do – to test, to seek out, to posit (true/false), and excite by that very energy dynamic, which we refer to as price action? There is patterning in the polarity maintained (or sustained) by the exchange process of a given market ecology. S&P, NASDAQ, Forex: each has its own electronic systematics constituting an organic process. Depending on how one codifies those ecological state(s), one may then quantify the relative forces of that exchange market. Thus, taking a rules-based approach, one may first consider the time: first 30 minutes. Perhaps this interval would be the most probable time period for inductive not deductive forces operating with a market ecology given accumulation of intra-session input and lack of inter-session processing, whereby patterning would become discernable. One may query if the same outcome, based on similar state-input-output correlations, is probable when testing that same hypothesis during mid and end of session (state transition) parameters? We may also consider programmatic interval deviations… How would 30/120/390 (30-3) be assimilated in comparison to 1/30/390 (1-13) correlations? dr

  2. Steve Leslie on February 19, 2009 8:54 am

    Fascinating, but the picture above looks like a skull taken at a precise angle. I don't know the significance of it if any but I thought it was eye catching. Reminds me of the movie Analyze This http://www.imdb.com/title/tt0122933/ where DeNiro is playing Mr. Viti as a deranged man to get out of prison. He is taking a Rorschach test and is describing weird things. Anyway, maybe I am deranged. Feel free to argue this point with me — or the other me!sl.

  3. jeff watson on February 19, 2009 6:48 pm

    Somehow, this post made me think of enantiomers, which are molecules that are composed of the same atoms but are mirror images of one another. Since they are mirror images, they are not super-imposable upon one another(chiral…also found in spiral sea shells) and will react differently with other entantiomers. In other words, they are the same chemical in every which way save the mirror image, but are a totally different molecule. Biochemical studies have shown that enantiomers will affect living organisms in different ways. One way of detection is that enantiomers will rotate polarized light in opposite directions to the exact same angle. Perhaps there are some hidden enantiomers in the market where the same data will make the market move opposite of what you’d think, because of the complete difference that cannot be detected by normal means and testing.

    Jeff

  4. Steve Leslie on February 21, 2009 7:51 pm

    There are so many subjects to visit such as the double helix of DNA which has been discussed here in the past. I was driving home in Florida and I noticed three flocks of birds, one behind the other. The fascinating thing was that they had the same pattern organized for each flock. One side of the V was slightly shorter than the other and there was a trailer bird. I seem to recall that this pattern has been tested in wind tunnels and it was discovered that this pattern offers the least wind resistence and allows the birds to draft off of each one. And to pull each other along Just as bicyclists do in Tours. Just remarkable. I recall watching the Blue Angels some years back and how they set up their famous four jet squadron pattern with three jets making up the V and a trailer jet. Coincidence? Hardly, I think.

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