Market Analysis for Dec 19th, 2015

General Thoughts For 2016 About Life, Society And Free Will

As we prepare to bid adieu to yet another year and begin the year 2016, I wanted to share some thoughts about which I have been pondering. 

Ultimately, those that are able to effectively utilize the perspectives presented herein will be able to rise above the crowd mentality and reap greater rewards within our financial markets. But, these perspectives certainly have broader application beyond our financial markets.

There is an age old question as to whether man has free will or is directed by some higher power.  Men have contemplated this question for as long as man has been able to communicate.  While I am not qualified to offer any definitive answer to this age-old question, based upon my own learning and life experiences, I clearly have formed my own thoughts on the matter, and would like to share it with you for you to ponder.  Ultimately, I am a seeker of truth in all I do, and am always open to exploring new avenues to arrive at the truth, so I would love to hear your own thoughts on the matter.

As you all know, I am an Elliottician.  To me, the theory presents a grander theme to life well beyond that of just the stock market.  It means that I believe that the human experience is patterned, and has a higher driven direction, within which we experience periods of progression and regression.  This phenomena is studied under the new discipline labeled “socionomics.” 

The socionomic hypothesis proposes that social mood determines the character of social events. Through biologically based impulses originated within the human brain stem, patterns in social mood have been identified which adhere to Fibonacci mathematics, which, ultimately, direct the human experience, en masse.

As Robert Prechter has written:

This patterning of social mood creates a sociological imperative that mightily guides and influences the character of individual and social behavior.  The resulting human actions, in turn, cause the trends and events of history.  The overall process may be termed historical impulsion.  As opposed to the traditional mechanistic models of aggregate behavior that are based upon presumptions of multiple exogenous causes and ultimate effects, socionomics recognizes that patterns of aggregate human behavior are endogenous, self-causing, self-regulating, self-reinforcing, and, to a far greater degree than has heretofore been imagined, predictable.

In a paper entitled “Large Financial Crashes,” published in 1997 in Physica A., a publication of the European Physical Society, the authors, within their conclusions, present a nice summation for that which they observed within society:

“. . . we have in mind the process of the emergence of intelligent behavior at a macroscopic scale that individuals at the microscopic scales have no idea of. This process has been discussed in biology for instance in the animal populations such as ant colonies or in connection with the emergence of consciousness.”

Much of what I have studied to date, and surmised on my own through observation and life experience, makes it quite clear to me that man is on a general path of progression throughout history.  While he experiences periods of regression, history presents the story of man within an overall path of progression. 

Now, I would ordinarily say that such progression, on its own, would not suggest any higher level “direction.”  However, when we take into account the periods of regression, and the mathematical precision within which they oscillate within the larger overall path, it is hard to come to the conclusion that something is not directing. or has pre-programed, if you will, this overall path. 

Please understand that this perspective I maintain is about man as a whole.  This is referring to the entire human experience, en masse.  This is not referring to man on an individual level, but as only the greater whole.  Therefore, the conclusion to which I have personally come is that the human experience, en masse, is on a path which seems to be patterned and directed. 

R.N. Elliott noted it thus:

“No truth meets more general acceptance than that the universe is ruled by law.  Without law, it is self-evident there would be chaos, and where chaos is, nothing is . . . Man is no less a natural object than the sun or the moon, and his actions, too, in their metrical occurrence, are subject to analysis . . . Very extensive research in connection with  . .  human activities indicates that practically all developments which result from our social-economic processes follow a law that causes them to repeat themselves in similar and constantly recurring serials of waves or impulses of definite number and pattern. . . “

While many may come to differing perspectives as to what is actually directing that path, to me, at least, it has become quite clear that there is a direction to the overall human experience which is beyond the control of any single individual within the overall society. And, the pre-programed herding mechanism within man’s brain stem serves to effectuate a unified direction for man-kind down a determined and patterned path. Therefore, I have, personally, come to the conclusion that there is a significant amount of determinism within human-kind as a whole, which has the natural law of the world as its core director, as ordered by Fibonacci mathematics.

In fact, this natural law, as defined through Fibonacci mathematics, is exhibited in relationships throughout the universe, such as proportions within the human body, plants, DNA, the solar system, music, population growth, and, yes, the stock market.  This underlying mathematical relationship is the one constant throughout all of nature and governs the laws within nature. In fact, the greatest minds of history, such as Pathagorus, Plato, and Kepler, all felt that these mathematical relationships were the key to the secrets of the universe.

Ultimately, it leads me to strongly consider that there is a certain amount of determinism to which I subscribe when dealing with man as a whole.  Certainly my religious beliefs have swayed my thinking on the matter to some degree, but what I have learned in being an Elliottician and about scocionomics have further strengthened this belief.

The main question with which I still struggle is the extent to which free will governs an individual’s decision making within the overall societal path.  In a study conducted by psychologist Vladimir Lefebvre of the School of Social Sciences at the University of California, Dr. Lefebvre came to the following conclusion:

“We may suppose that in a human being, there is a special algorithm for working with codes independent of particular objects.”  

Specifically, when his subjects were asked to sort indistinguishable objects into two piles, their decision making within that process divided the objects into a 62/38 ratio.  In other words, these individuals exhibited a Fibonacci mathematical tendency in their personal decision making.

So, while we clearly have the ability to make decisions on our own, we have to question if we have been pre-programed with a form of governor upon that decision making power.  Yet, if one is aware of these tendencies within our nature, can one overcome these tendencies?

It is along the same lines that I view “group think.”  We have seen periods of history where individuals have engaged in absolutely heinous acts when following the general group.  It is clear that the individual decision making within those periods were directed more by the herding tendency than their individual ability to rise above such herding tendencies.  Such “group think” also maintains the herd on the wrong side of financial markets during periods of extremes, being unable to rise above the masses to recognize it for what it is - a period of extreme financial danger.

For those of us that have become aware of these tendencies, and are able to recognize when the masses are engaged in a certain type of “group think,” we have a very powerful tool at our disposal.  Whether that means we are able to rise above societal mistakes, or whether we are able to rise above the herding of the masses within the financial markets at points of extreme, it is clearly a powerful tool if we are able to be cognizant and maintain an appropriate focus.  

So, as we are about to face the challenges presented by a new year, I wanted to place before you something to ponder which would have application within and beyond our financial markets.  I also want to take this opportunity to wish you and your families a very happy and healthy new year.  May the new year bring you and your families health, prosperity and growth, and may we continually strive together to uncover the truths within our lives and within our society so that we can all maintain the appropriate focus.



               Avi Gilburt


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