Posted Apr 11, 2014 by Martin Armstrong
There are three complete different core models that we are employing that are absolutely totally unique and the interesting thing is when they CONVERGE – not that they have anything in common otherwise.
The Economic Confidence Model is a business cycle and that has been tested back to at least 600BC. It shows the rise and fall of empire, nations, and city states. Because it is derived form international data, it provide a unique perspective of the world as a whole. The frequency repeats throughout all cultures and centuries and incorporates everything since it is a nature frequency. That means nature and man. It is a guide from the business cycle perspective that the New Yorker Magazine called the “Secret Cycle”. Others have remarked at turning points such as Barrons in 2011.
Then every market has its own frequency that is in part created by a host of interactions. They move in and out of convergence with time as illustrated here with the gold frequency of 16 weeks and the 18 week frequency in silver. Everything has its own time and place.
There there is the pattern recognition models. Here the computer is mapping patterns and that is across ALL markets demonstrating that it is human nature that is the common denominator. How people react is consistent regardless of the market. This is not a 100% perfect, but to be even better than 50% accurate demonstrates there is a common bond.
These three approaches to forecasting are important for they are all different and what becomes exciting is the CONVERGENCE. This is the critical aspect to watch and understand.
Keep in mind that we always NEED the skeptics for the markets move always against the majority and that is how they function. Markets crash when the majority are bullish for they try to sell and there is no bid. Likewise at the bottom, you need the excessive bearishness where they are short and most people will not buy when markets continually decline.
In the end, the key is CONVERGENCE and the more model that accomplish this at the same time, the higher the probability that the forecast will be correct.