Money is only a tool. It will take you

wherever you wish, but it will not replace you as the driver.

Financial History does not repeat itself but it always rhymes

Make sure that what you know is true and be aware of what you do not know

There is always some one that knows what you do not know and acts upon it, to your disadvantage of course.

The most recent example is the economic crisis that developed in 2008/9 http://www.youtube.com/watch?v=UC31Oudc5Bg

Prepared by Haim R. Branisteanu

Financial Markets Behavior Experts and Technical

Analysis

My personal believes on human behavior related to financial markets and the so called “market wisdom” and technological advancement/modernization etc.,

ם׃ הבל הבלים אמר קהלת, הבל הבלים הכל הבל׃ מה־יתרון דברי קהלת בן־דוד, מלך בירושללאדם; בכל־עמלו, שיעמל תחת השמש׃ דור הלך ודור בא, והארץ לעולם עמדת׃ וזרח השמש

ובא השמש; ואל־מקומו, שואף זורח הוא שם׃ הולך אל־דרום, וסובב אל־צפון; סובב סבב הולך הרוח, ועל־סביבתיו שב הרוח׃ כל־הנחלים הלכים אל־הים, והים איננו מלא; אל־מקום,

שהנחלים הלכים, שם הם שבים ללכת׃ כל־הדברים יגעים, לא־יוכל איש לדבר; לא־תשבע עין מה־שהיה הוא שיהיה, ומה־שנעשה, הוא שיעשה; ואין לראות, ולא־תמלא אזן משמע׃

כל־חדש תחת השמש׃ יש דבר שיאמר ראה־זה חדש הוא; כבר היה לעלמים, אשר היה מלפננו׃ אין זכרון לראשנים; וגם לאחרנים שיהיו, לא־יהיה להם זכרון, עם שיהיו לאחרנה׃ The words of Koheleth, the son of David, king in Jerusalem. Vanity of vanities, saith

Koheleth; vanity of vanities, all is vanity. What profit hath man of all his labor wherein he labored under the sun. One generation passed away, and another generation cometh; and the earth abideth for ever. The sun also ariseth, and the sun goeth down, and hasteth to his place where he ariseth. The wind goeth toward the south, and turneth about unto the north; it turneth about continually in its circuit, and the wind returneth again to its circuits. All the rivers run into the sea, yet the sea is not full; unto the place whither the rivers go, thither they go again. All things toil to weariness; man cannot utter it, the eye is not satisfied with seeing, nor the ear filled with hearing. That which hath been is that which shall be, and that which hath been done is that which shall be done; and there is nothing new under the sun. Is there a thing whereof it is said: 'See, this is new'?--it hath been already, in the ages which were before us.

How little we, humans and as a civilization have changed in our financial behavior within the deluges of a presumed advanced modern State

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt!"

-- Marcus Tullinus Cicero, Roman Senator, Philosopher 63 B.C. In a statement Jefferson made, in a letter to John Taylor in 1816.

He wrote, "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, (future generations or years to come) under the name of funding, is but swindling futurity on a large scale.

Thomas Jefferson was one of the most visionary and smartest US presidents to this day

Example of mindless behavior of professional financial market participantsDid the Australian Economic activity dropped 15% in one month?

Some basics on human character and the resulting behavior

More recent scientific research papers demonstrated that human character are based on his genomic makeup and education can only enhance or depress, but not alter those embedded qualities which are hereditary . The human genomic makeup stretch a long way back to the mammals evolution of which we are part of, and therefore we carry residual character qualities of our forbearers, like the Neanderthals etc.

More so all living things establish social networks based on their origins, characters and way of living, by establishing “flocks of same feathers”. The more sophisticated or brainier, the living creature is, the more complex and sophisticated the social order of the established network is. From ants and bees, to grazing animals to baboons to humans. As a result the complexity of the individual behavior within the network grows solely to achieve its genomic embedded desired goals or needs depending on the perceived maximum success within the network.

The state of mind or psychology or reasoning of smaller groups of human networks to world events is difficult to predict from afar, or by not being intimate to the inner relationships within those networks or their influence on other networks and therefore the complexity of predicting human behavior which results in economic developments which are impossible to predict. We build economic models on what we know and think that all living networks are the same or have same goals.

Logic observation of your surroundings, understanding human behavior and it’s needs, is

the most important ingredient for success. It is important to remember that there are several basics desires and goals

of each person which is easily identifiable and are in general quite universal. In general terms human behavior is geared toward his and his family wellbeing, a continuous pursuit of more riches and safety for his offspring’s, social status, power, fame and admiration which desires in some cases trumps what is agreed to be “common wisdom”. ***

On the other hand and at the same time one should remember that what we call “talent” or “visionary wisdom” is not acquired or taught in any school only enhanced. A child must be born with those qualities embedded in his genomic makeup.

Leonardo da-Vinci, Mozart, Darwin, Steve Jobs where born with unusual qualities embedded in their genomic make up. They enhanced them not by education but by observation, logical vision of the world or events in nature or behavior of people around them. Non of them had formal education in the fields they excelled.

Others like Bill Gates a Harvard University drop out, had the qualities to understand and identify what product would be a business success and just stole the concept or bought it well below it’s intrinsic market value, and then defending the deed by legal means. Same can be said about Warren Buffet who is a classic financial predator.

Today’s Experts and experts advice or predictions compared to

Witchcraft

Differences between Expert prediction and Witchcraft prediction are there any? Or are they just preaching's to suit the clients aspirations.

There is a huge difference between them on the following approaches;

(i) the way they do their public relations and the way they dress,

(ii) the tools they use for their predictions and how to gain popularity,

(iii) use of a lot of acronyms or jargon words no one really understands

(iv) the way their presentations are made to gain client confidence,

(v) the amount of pay they demand for their prediction …. and more.

The results and accuracy of today experts or years past witchcraft prediction are awfully similar as both where or are wrong in most cases

In summary today experts have a similar value to society as the years past witchcraft practitioners – nothing can substitute knowledge.

How likely are today’s experts wrong?

The science of of expert predictions is pretty spectacular. Science writer David Freedman, author of the book “Wrong”, determined that two-thirds (66%) of studies in major science journals are shown later, to be wrong. http://www.freedman.com/p/wrong-book.html

Almost 100% of long-term economic studies are proven to be wrong based on the grand-daddy of all studies related to experts, made by Philip Tetlock Professor of Organizational Behavior at the University of California, Berkeley.

Prof. Philip Tetlock, spent 20 years following 300 elite media and government experts making 82,000 predictions.

After 20 years, the predictions did a fraction better than a chimpanzee throwing darts at a board.

Tetlock found that the best experts were uncertain, because that kept them thinking about it. But that expert you rarely see on television. They’re boring.

Experts Bias, Blindness and How We Truly Think – a quote from Daniel Kahneman

Organizations that take the word of overconfident experts can expect costly consequences. A Duke University study of chief financial officers showed that those who were most confident and optimistic about how the Standard & Poor’s index would perform over the following year were also overconfident and optimistic about the prospects of their own companies, which went on to take more risks than others.

As Nassim Taleb, the author of “The Black Swan,” has argued, inadequate appreciation of the uncertainty of the environment inevitably leads economic agents to take risks they should avoid. However, optimism is highly valued; people and companies reward the providers of misleading information more than they reward truth tellers. An unbiased appreciation of uncertainty is a cornerstone of rationality -- but it isn’t what organizations want. Extreme uncertainty is paralyzing under dangerous circumstances, and the admission that one is merely guessing is especially unacceptable when the stakes are high. Acting on pretended knowledge is often the preferred approach.

What about the economic expert pundits?

The economy has always been hard to predict. There’s a famous quote by a Yale economics professor: “Stocks have reached what looks like a permanently high plateau” made on Oct. 17, 1929, days before the Great Crash, same prediction repeated itself in all bubbles.

As an example William White an ex-management consultant who flew all over the world, advising top companies and governments and who helped run the Bank of Canada, and was also a top banker in Europe, once said; the most important thing for an economic expert is to look right, dress right and drop a lot of jargon during his meetings.

No one knows with statistical accuracy how to make a business run or predict the economy. William White is one guy who really pointed to the truth and said; – “we pretend economics is a science, but it’s not. It’s psychological mass behavior. It’s unpredictable”.

Don’t Blink! The Hazards of Confidence – From The NY Times - article by Daniel Kahneman

Mutual funds are run by highly experienced and hard-working professionals who buy and sell stocks to achieve the best possible results for their clients. Nevertheless, the evidence from more than 50 years of research is conclusive: for a large majority of fund managers, the selection of stocks is more like rolling dice than like playing poker. At least two out of every three mutual funds underperform the overall market in any given year.

More important, the year-to-year correlation among the outcomes of mutual funds is very small, barely different from zero. The funds that were successful in any given year were mostly lucky; they had a good roll of the dice. There is general agreement among researchers that this is true for nearly all stock pickers, whether they know it or not — and most do not. The subjective experience of traders is that they are making sensible, educated guesses in a situation of great uncertainty. In highly efficient markets, however, educated guesses are not more accurate than blind guesses.

http://www.nytimes.com/2011/10/23/magazine/dont-blink-the-hazards-of-confidence.html?pagewanted=3&_r=1&sq=Kahneman&st=cse&scp=1

When and where we do need Advisers or Consultants?

We need consultants or so called experts for; For a second public opinion –(i) in the Court of law – as judges may

know the law but are lousy business people, or (ii) for our shareholders and other interested parties to justify or protect our action and business interests

We need consultants in any contact with local or governmental authorities to smooth the bureaucratic process and advance or defend our interests.

A good consultant has the right knowledge of the mentality and weaknesses of the bureaucracy involved if at local level or government agency level

A consultant dealing with the authorities should know the laws and regulation and the decision making process within bureaucracy and who and how to approach the officials to best promote our interests

Your accountant and your attorney and their staff are also your consultants in assisting you or your business in the related fields in most aspects of your business

A good consultant will not always agree with you and will make you rethink a strategy or product or be of assistance where you just do not have the manpower to overcome “brainpower bottlenecks “within your organization.

Lessons from the Financial Crisis: - What’s good for few WS companies and brokers can topple an entire economy

Innovation drives markets – that is WS firms main mantra. But when innovation is left unharnessed and spreads too fast, regulation can’t keep up, and the so called WS “innovation” which is based only on greed implodes.

During the 2008 financial crisis, loose regulations at the institutional level combined with lenders’ “innovative” restructuring at the organizational level led to the de-stabilization of the mortgage market and its practices, according to research done by Ass. Professor Jo-Ellen Pozner at the University of California, Berkeley’s Haas School of Business.

“WS organizations seeking profits from making bad mortgages and then securitizing them and sell them to unaware investors seemed like a good idea, (but only) for those making the commissions, but when you aggregate that behavior to the institutional and/or WS industry level, you get a very dysfunctional industry,” (Pozner - June 03, 2011) http://www2.haas.berkeley.edu/Videos/Pozner-Jo-Ellen.aspx

The Psychology of Bankers and simple bank loans or Corporate Debt

In business any banker is not your friend all he is after is his compensation and commissions. Therefore before asking for a loan prepare an impressive presentation of your business, take advantage of the banker greediness after all his job is to make loans and he is after his commission, and in most cases the banker is not smart enough to understand your business. (In banking if you want a friend, have dog.)

Prove to the banker that other banks are interested to give you a loan and make it clear to him he does not make you any favors. You can verbally “drop names”, but do not make any false statements or exaggeration in your presentation. In summary, act as a consultant, give the impression you know much more than the banker.

There are a variety of loans available if from Banks or Financial institution they are;

Corporate loans – Corporate loans are given to corporation with a history of profitability strong corporate cash-flow and identifiable assets. Criteria is mostly based on the coverage ratio of the interest and principal payments to free cash-flow.

The issuance of corporate debt is similar corporate loans. The advantage to the company is that in the event of default the bank credit lines are mostly unaffected.

Other types of non traditional loans

Asset Based loans – are given to companies that are relatively new and not well established their products are perishable or do not prove continuous demand or prone to clients returns. The loan amount is depending on the company partial value of accounts receivable, finished inventory, machinery and equipment RE etc.,

Equipment leasing loans are done mostly on equipment that can be easily sold to another party such as airplanes for example, usually used by a fast growing company who did not generate enough cash to buy the new equipment and do not qualify for a loan to buy the assets. It actual is a long term rental agreement of the asset from a financing company with the financing company holding the ownership.

Equipment leasing spread financing – of airplanes or rolling stocks (ACF, DELL)

Sale –Leaseback Loans are used mostly after the asset was fully depreciated and to generate more cash to the company (it is mostly done in RE transactions).

For example if a pharmaceutical company has a blockbuster drug who needs FDA approval and substantial marketing expenses but do not have the means to finance those expense will enter into a Sale – Leaseback agreement with the lender and convert into a renter of the asset for a defined period of time at predetermined rate.

Bankruptcy related loans

Bankruptcy remote loans are mostly done in situation that there are regulatory or tax uncertainty whereby the regulator tax man may put a lien on the asset or force the company into bankruptcy. If the demands settle to the benefit of the company the company pays back the loans and receives their assets or in case of bankruptcy the lender reposes the asset. (Partnership, example Golden Share, ACF)

Debtor in Possession (DIP) loans are loans that from a legal point of view all assets are in actuality sold to the lender including intellectual property, and the company continue to operate under court supervision settles the unsecured debt and tries to work itself out to profitability and regain control of their corporate assets. (Photo 47th Street)

Structured loans and PIK’s – Senior, Mezzanine, Junior Loans is a multilayer loan used in any of the above type of financings whereby the lower the loan rank the higher the interest rate is charged. Usually the Junior lender who is similar to equity investment, receive a pay in kind in addition to the preset interest rate if the company is very successful – used mostly in leverage buyouts of substantial amounts of well established companies.

The emotional state of market participants

or do financial seers or economists need brains?

The emotional state of market participants is best described in article of Neuro-economics - Do economists need brains? - (The Economist Jul 24th 2008)

http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=11785391

Since the 1980s researchers in this branch of the discipline, (of behavioral economics) had used insights from psychology to develop more “realistic” models of individual decision-making, in which people often did things that were not in their best interests. Neuro-economists have focused on such issues as people’s reasons for trusting one another, apparently irrational risk-taking, the relative valuation of short- and long-term costs and benefits, altruistic or charitable behavior, and addiction.

There is also growing interest in new evidence from neuroscience that tentatively suggests that two conditions of the brain compete in decision-making: a cold, objective state and a hot, emotional state in which the ability to make sensible trade-offs disappears.

The justification for Technical Analysis – the “nonsense” that primates believe in

In general people, want to be safe and certain, of the events that will unfold and therefore, they have a hunger for rules because they need to reduce the complexity of events or the dimension of matters in such a way, that they can simplify and “get recipes of unfolding events into their heads”, or better said be able to squeeze them into their memory. The more random information is, the greater the dimensionality, and thus the more difficult it is to summarize.

As such there is the human tendency to ignore the complexity and try to summarize even more, you are trying to find a “perceived rule” that anticipates unfolding events at any given time, by ignoring complexity.

The more you summarize, the more order you put in, the less randomness. Hence the same condition that makes us simplify, pushes us to think that the world is less random, than it actually is, and we believe to have found the “holy grail” of the anticipated events.

“Feeling Better” - Technical Analysis does exactly that - gives you the feeling that “you know” the outcome – but you do not

Both the artistic and scientific enterprises are the product of our need to reduce dimensions and inflict some order on things. Think of the world around you, try to describe it and you will find yourself tempted to weave a thread into what you are saying, in a novel, a story, a myth, or a tale, all have the same function: they spare us from the complexity of the world and shield us from its randomness. Myths impart order to the disorder of human behavior and perception and the perceived “chaos of human experience.”

The very same desire for order, interestingly, applies to scientific pursuits - it is just that, unlike art, the (stated) purpose of science is to get to the truth, not to give you a feeling of organization or “make you feel better.”

Once you identify a repeat pattern you anticipate the same or at least similar developments of events will develop. Familiar pattern which repeat themselves randomly are the “bedrock” defining TA that well educated professionals are betting millions on them – even that it is all “hubris”

All TA does is giving you the “Feeling Better” and the feeling that “you know” the outcome of a very complex system that is summarized in a series of numbers over a period of time, and in the case, of FOREX the exchange rate.

What is Technical Analysis Technical Analysis is part of behavioral economics

which uses insights from the state of mind of the market participants to develop more “realistic” models for the individual decision-making which try in a simplistic form to predict future pricing of financial instruments based on a two dimensional graphic information with 4 data points.

The 4 data points are prices of same financial

instrument over a defined period of time, at open, low, high and close, and which in many cases is arbitrary (day, hour, minutes, week etc.), but in some cases also correlated to some degree to the settlement dates of the said instruments.

What is the purpose of Technical Analysis

TA tries to anticipate the psychology of the market participants and their emotional state of mind in connection to the financial instrument they trade by applying simplistic formula and graphic price relation between various data points of price and accurately with some “curve fitting” predicts the past!.

Some aspects of TA take also into account the transaction volumes which better assists to predict turning points and price movements or anticipation of events, only known to few market participants (an feature used also to identify insider trading).

Why Technical Analysis is so popular

The popularity of TA is a direct result of the desire of active market participants to instill some orderly short term price movements in an environment which by definition is very random in its behavior due to the very wide individual participation of buyers and sellers and their view of the pricing of same financial instrument.

The mere belief in TA theories, of a big enough crowd of sellers and buyers, makes TA a self fulfilling discipline in the short term. On the other hand the complete dismissal of long term TA is similar to completely adhering to the decision making process on TA alone over same period of time. The result – think and observe all the time!

…… continuation

The popularity of TA grew substantially with the availability of computing power and wide spread dissemination of quotes for financial instruments. During those times a slew of TA indicators where introduced with each creator claiming having a better mousetrap to predict future price levels. Since, every few years some one else comes up with a new slew of graphical TA indicator which are in most cases a variant of the old.

Is Technical Analysis useful Long term TA has value if taken into

account with fundamentals and can accurately predict the state of mind of the market participants from euphoria to deep distrust or outright depression

Based on the fact that almost always,

there are market participants, that posses non public knowledge about a financial instrument, if fundamental information or intention of a substantial anticipated transaction the observation of TA discipline can assist in anticipating short term price movements.

……continuation Further more some aspects of TA can provide

useful information of tops and bottoms and exhausting point in markets which we as human can perceive the unfolding price action, much better in graphic form, then by reading plain numerical price series.

The visual processing of information by humans seems far better than that of processing plain streams of numerical data, because visual perception in humans developed millions of years before mathematics and there lies the popularity of TA

Accuracy of Technical Analysis Accuracy and benefits of TA in itself are

slightly better that tossing a coin or throwing darts at a list of stocks, for a novice user, without a “feel” for the market, but can be of substantial assistance as a complimentary tool of fundamental study of the financial instrument representing the stock or debenture of a corporation, or commodity or currencies etc.

There is growing evidence that the directional movement of financial instruments are heavily influenced by the plain emotional state of the major market participants engaged in the in the transactions like hopes, desires or manipulation etc.

Technical Analysis used by Financial Institution

TA is a more simplistic mathematical set of function for processing market pricing information reflected in visual graphic results, than the more complex historic and statistical models employed by so called “Quants”, who are employed by the big institutional investors, who in essence employ similar information of pricing volume and price correlation within the financial instruments, representing a myriad of pricing data or price points across a wide selection of financial instruments to achieve the holy grail of relative “risk free” profit generating mechanism.

This concept is employed in most big financial institution (also called “black box trading”) and the trades are executed “blindly” based on mathematical models, scalping temporary price abnormalities of various financial instruments. The very high volatility in financial markets is a direct result of unwinding those trading practices which was first proven on 19th of October 1987

Does TA work in maximizing return for market participants?

In certain instances and mostly in short term trading strategies it does, due the random price changes and for the simple reason that the popularity of the technique is wide spread and market participants adhere to the pricing points defined by the various models.

But noting is for free - even this so called “Secure DELTA” trading systems generated over $2,3 billions in losses to UBS during the month of September 2011.

TA in conjunction with rigorous fundamental analysis can provide useful information as to the psychology and attitude of the market participants and correctly point to exuberance, euphoria or overexcitement and the mirror of the same emotional state of mind like pessimism or depression.

Prepared by Haim R. Branisteanu

Some of the general concepts Moving Averages of prices in various forms

defining trends Moving Averages of prices trying to capture

emotional state of market participants (RSI, Stochastic, Bollinger Bands, and various “Oscilators”)

Geometric formation in the price chart trying to reflect / indicate the hidden desires of market participants (Wedges, Triangles, Bases tops, Gaps etc.).

Time and Price ranges which try to anticipate the perception of the market participants of pricy or cheap pricing of the financial instruments (Gann, Fibonacci, levels and “fans” ,“arcs”, Speed Lines, etc.)

… continuation Outright impulse anticipation of market

participant’s behavior like Elliot Waves A combination of the above reflected in a very

old practice from Japan, called “Candle Sticks” which include many of the above solutions in a pure visual and color coded interpretation.

More exotic approaches as a combination of the above combined with planetary movements or longer term sunspots cycles of which the moon cycle was once a quite reliable indicator

TA in closed markets equities In closed markets like national stock markets

the reading of “market internals” which includes advancing and declining stocks, new highs new lows, up and down volume, absolute volume of the market or of selected indexes produce new indicators. This information, assist in the definition of new indicators which are constructed, like market breath, ARMS index / TRIN, McClellan Oscillator etc. and many instances, also the above TA criteria are applied. In many cases the resulting indicators are a new set of TA awareness indicators (McClellan Summation Index, resulting in the Hindenburg Omen or Titanic Syndrome at market tops using new highs and new lows + the DJIA as an example).

……continuation One of the more classic analysis of the above

are other geometrical formation like the very popular “head and shoulder” formation, “3 peaks and a dome”, the “Cup and Handle” formation “Turtle” or “Momentum Speculation”, “The Hindenburg Omen” the FULL Moon effect, Sunspot cycle or the long term concept of the “Kondratieff cycle”, which also apply to population growth and debt levels (which is also known as Schumpeter-Dent model).

One empirical measure to remember is that the value of a “stock market” is correlated to the real GDP + real inflation of the host country + an innovation factor of few % points – everything else is noise, which noise, TA disciples claim to decipher

Examples of TA functions & concepts

Average true range - averaged daily trading range Coppock - Edwin Coppock developed the Coppock

Indicator with one sole purpose: to identify the commencement of bull markets

Dead cat bounce - the phenomenon whereby a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement

Elliott wave principle and the golden ratio to calculate successive price movements and retracements

Hikkake Pattern - pattern for identifying reversals and continuations http://www.chesler.us/resources/articles/chesler0404.pdf Momentum - the rate of price change

Point and figure charts - charts based on price without time

Overlays - are generally superimposed over the main price chart. Resistance - an area that brings on increased

selling Support - an area that brings on increased

buying Breakout - when a price passes through and

stays above an area of support or resistance Trend line - a sloping line of support or

resistance Channel - a pair of parallel trend lines Moving average - lags behind the price action

but filters out short term movements Bollinger bands - a range of price volatility Pivot point - derived by calculating the

numerical average of a particular currency's or stock's high, low and closing prices

Price-based indicators These indicators are generally shown below or above the main price chart

Accumulation/distribution index—based on the close within the day's range

Average Directional Index — a widely used indicator of trend strength

Commodity Channel Index - identifies cyclical trends MACD - moving average convergence/divergence Parabolic SAR - Wilder's trailing stop based on prices

tending to stay within a parabolic curve during a strong trend

Relative Strength Index (RSI) - oscillator showing price strength

Rahul Mohindar Oscillator - a trend indentifying indicator Stochastic oscillator, close position within recent trading

range Trix - an oscillator showing the slope of a triple-

smoothed exponential moving average, developed in the 1980s by Jack Hutson

Volume based indicators & Other graphic Indicators Money Flow - the amount of stock traded on days the

price went up On-balance volume - the momentum of buying and

selling stocks PAC charts - two-dimensional method for charting

volume by price level Wedges and Triangles Fibonacci fans arcs and levels and Gann angles http://www.analistademercado.com.br/Fibonacci01.pdf Elliot Waves – Five wave pattern (dominant trend) Three wave pattern (corrective trend) http://en.wikipedia.org/wiki/Elliott_wave_theory

Candle Sticks – main patterns Candle Sticks – main patterns Swirling tops, bottoms Dark clouds Engulfing candle Tree black Crows (bearish) or Tree

white candles (tree Marubozu) (bullish)

There are other multiple forms of candlestick chart patterns.

Longer Term Economic Cycles Longer Term Economic Cycles which can

be called also part of the Technical Analysis are mentioned below.

A number of types of business cycles, in the traditional sense of a fluctuation within a regular period have been proposed. The main types of business cycles enumerated by Joseph Schumpeter, and others in this field, have been named after their discoverers or proposers:

Long term Economic Cycles the Kitchin inventory cycle (3–5 years) —

after Joseph Kitchin, the Juglar fixed investment cycle (7–11

years) — after Clement Juglar, the Kuznets infrastructural investment cycle

(15–25 years) — after Simon Kuznets, Nobel Laureate,

the Kondratieff wave or cycle (45–60 years) — after Nikolai Kondratieff.

the Forrester cycles (200 years) - after Jay Wright Forrester.

the Toffler civilization cycles (1000-2000 years) - after Alvin Toffler

Even longer cycles are occasionally proposed, often as multiples of the Kondratieff cycle. Interest in traditional business cycles was strongest before World War II. However, interest has waned since the development of modern macroeconomics, which generally gives little support to the idea of regular periodic cycles.

At present we are in a period where Central Bankers and the political leadership of most world nations are trying to fight the Kondratieff Cycle and Debt cycle -