Feb

25

Sometime ago Victor posited a relationship between the angle of descent in the market and the resulting bullish reaction. His argument was based on the physics analogy with Brewster's angle.

Today, on his blog my friend the market analyst Chris Carolan provided a remarkably interesting study of this phenomenon at three time scales.

Readers of Ed Spec will immediately recognize 'When in doubt drop a perp' as sage geometry advice. As a recovering physicist, I immediately recognized a phenomenon called Brewster's angle. In the physics of light this principle governs reflections from such surfaces as glass and water and others. The principle can be most succinctly described as: the angle of incidence equals the angle of reflection.

In this case the angle of incidence is the initial bear decline. The angle of reflection is the subsequent bullish reaction.


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