“The ART of accurately predicting Market Trends using several sciences”
Oct 2014
By Alex Antoniou
CEO Nexxus Partners
I was born in the early 70’s and I still remember many talks with my grandfather.
My grandfather was born in 1899 and he was a commodity trader. Very successful in his job I must say and I had a special relationship with him , so to speak, because when he was coming home, he was always bringing round candy bars both to me and my sister.
He traded wheat, coffee , sugar and other commodities and even though I could not understand the value of wheat or coffee and its’ fluctuations in the market , I could definitely understand the value of sugar at the age of five !
One time as we were sitting outside in the yard he told me one thing : “Alex my boy, remember whatever you decide to do in your life, life itself is a circle. Everything moves in circles. Even sugar from the candy bar you eat now !”
I understood this concept better when a couple of month later, he bought me the first bicycle and he taught me how to bike !
And the week after that he bought me my first watch!
So there I was again, with the round candy bars in my mouth riding circles watching the time making circles itself !
By the time I went to the first grade, I was already initiated with numbers and geometry, specially everything that had to do with circles : )
As I was growing he was constantly trying to give me a perspective of why the chocolates I bought in the school in January would not have the same price a year later, but within the year I would occasionally buy them with a discount.
Then he told me that if I used the allowance he gave me to buy chocolates and sell to my friends , I would make a profit and I could use part of that profit to buy more chocolates and sell to more of my classmates !
Soon by the age of fifteen, I was the most popular guy in my school , not to mention one of the “sweetest” .
It was a Thursday afternoon in 1986 when my mother said “ Alex your grandpa wants to see you”.
When I went home I found him sitting in his armchair smoking, putting out the cigarette.
-Alex how are you doing in school ? Ohh don’t tell you mother about the cigarette ok ?
- Hey grandpa everything is ok, and don’t worry about the cigarette …
- You know Alex ,I got old enough and I think it’s time for me to go somewhere else. I feel tired , but I want to tell you something very important : Do you remember when you a little kid what I taught you about the circles ?
- Yes I do grandpa, and I discovered a whole new world in the school”
- Well grandson , history repeats itself over and over again, like every spring the flowers bloom, they will do it next year same season. So your life will have ups and downs , but when you fall down, remember it’s only temporary. All you have to do is stand up and try again.
If you decide to trade like I did in my life, remember Alex that all goods have a time cycle and if you observe closely their cycles , you will find a way to be very successful in your life.
He was speaking those words with his eyes closed and those were his last words…
…“remember Alex that all goods have a time cycle and if you observe closely their cycles , you will find a way to be very successful in your life ”
It was about ten years later in 1996, when I first saw a Dow Jones chart and that was when it hit me. Instead of candles or bars in the chart, I was seeing “cycles”.
Up, Down, Up, Down, over and over like grandpa said !
And after that, it started becoming an obsession :
“ Where and when will it stop ??? Why does it stop there, why didn’t it go higher ? Why does it fall so rapidly, why did it stop down there ?”
“why does the price move very fast in certain periods of time and why does it consolidate other times?” What’s the relation of the year that has 365 days and the circle that has 360 degrees ? If 1 day equals to one degree of the circle then how can we relate what is happening within the calendar year inside the circle ? ”
Those were the questions that I would soon start experimenting and looking for answers .
Since everything in life is inter related , I started observing Astronomy, because the 365 days is what it takes for our earth to make a full rotation around the sun. So if this is important, maybe other planets have equal or at least similar importance so to speak.
One day i was in this all-in-one- sports club with swimming pools , squash rooms, basketball fields etc, playing tennis , and my friend threw his basketball into my tennis court where I was shooting for my last point, telling me “ Alex we have to go, like an hour ago ? ”.
The ball hit the fence and by anger I hit the tennis on the fence as well.
So here’s what happened : Both balls were bouncing up and down with different heights, but there was a moment that they BOTH hit the ground simultaneously.
And how would I interpret that ? Since the two balls were of different dimension, and weight , they both obeyed the synchronization law in Physics They were not synchronized in the air, ( height ) BUT at the bottom !
So different balls = different markets
Synchronization law = all markets will be synchronized AT THE BOTTOM .
So I started looking back in history the major lows in the market . Where we had wars, disasters and how would those be related to a periodic model , since as we know history repeats itself : )
And this is where it hit me : What makes people panic ? Is there any Chemistry involved related to Psychology ?
My next study included chemical equations or compounds that would affect the human neurological system. Because it’s always the nerves that create attitude or standard behavioral schemes.
For instance “can you have lunch outdoors where there’s an excessive amount of smoke ?”
Apparently you would change seat or even restaurant … ! On the opposite if instead of smoke you would smell exotic fragrances, you would have different attitude, maybe you would want to stay more and order more and even talk about this place. Right ?
So I started researching several chemical compounds. Eventually I found that the H2S (hydrogen sulphide) is a compound that causes problems and possible asphyxiation to our neurological system.
And that is when panic comes. Most people have not trained their “ panic muscles ” and as a consequence the fear causes them loss of control. There are people that can hold their breath under water for 20 sec, and there are others that can hold it as long as 5 min, while the world record is somewhere between 9–10 min ! So it’s all a matter of practice.
The next research had to do with Astronomy.
I thought since all planets are round and we follow a cyclic model, where time is a circle, perhaps there a mathematical or chemical correlation.
So I started examining the planets and their full rotation around the sun :
Our earth takes 365.26 days to rotate around the sun. Likewise
Mercury 88.97 ,Venus, 224.7 , Mars 686.98 , Jupiter 4,331.98 , Saturn 10,760.60 ,
Uranus 30,685.50 , Neptune 61,285.25 and Pluto 90,465.38
Then I started looking what those planets consisted of .
And this is what I found :
http://en.wikipedia.org/wiki/Atmosphere_of_Uranus :
“The troposphere hosts four cloud layers: methane clouds at about 1.2 bar, hydrogen sulfide and ammonia clouds at 3–10 bar, ammonium hydrosulfide…”
… and this is where it gets much more interesting :
The Uranus needs 30,685.50 which is approximately 84 years.
If we go as back as the 1800’s, we had the first biggest crisis in 1819
http://en.wikipedia.org/wiki/Panic_of_1819
The second biggest crisis occurred in 1903 in Venezuela and the Balkans.
http://en.wikipedia.org/wiki/Venezuelan_crisis_of_1902%E2%80%9303
And the third one was the one in 1987 where all markets collapsed and it’s remembered as the “ Black Monday Crisis”.
http://en.wikipedia.org/wiki/Black_Monday_%281987%29
What is the relation between those three crisis ?
If you add 84 years to the first crisis of 1819 = 1903.
And if you add another 84 +1903 = 1987, you have the third crisis.
So this periodic model somehow tells us that the next big crisis will most likely occur in
1987 +84 = 2071 .
And then I wondered “ where is the 2008 crisis ?”
So I asked my self again “ What if Uranus makes half rotation or ¼ of the rotation around the sun ? What happens then ?”
And… ¼ = 21 years.
1987 +21 = 2008 !
http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308
So with the same model ½ rotation which is 42 years , 1987 +42 = 2029.
Apparently we’ll have another serious crisis in 2029 …
After that, I realized that since there was a very long term future model, all I had to do was to break this into pieces and see what is happening in the markets in much shorter term.
This is a Daily chart of the Eur / Usd.
When each cycle closes we have a major reaction in the market. And when we break a bigger cycle to smaller ones, we can determine a little bit more accurately the market movements.
Notice than the orange cycle closes and the new ones opens up the Eur/Usd stops it’s bearish trend and starts a bullish one. The same with the red one !
This cyclic model although it cannot tell us the price level , but could definitely tell us “when” we will have a bullish or bearish market, which is also very important !
From this chart although it stops in Sep 12’, we have full projection until the end of 2014’.
Notice that April, July 2013.we have major cycles closing …
Indeed on April 4th 2013, we eventually had a low of 1.2743 , respectively and again on
July 9th : 1.2753 !
This model cold tell us approximately “when” the trend would change, so the next step would the price level.
Apparently the more precise you become on whatever you do , the more accurate you will have to become as a whole.
And let’s not forget , this is a race not everyone finishes.
I was watching a documentary the other days how Bugatti managed to break the 400 klm / hr limit with the “Veyron” model . A $2,000,000 car !
http://www.youtube.com/watch?v=88dpzaV-kf4
So it is not simply a bigger engine with more power, it has to do also with keeping the vehicle into the ground. This is a speed that airplanes take off ! They used materials and methods NASA employs .
They said that with 400 klm / hr it takes only 15 min from the friction to burn the entire tire ! And apparently there is so much more …
Likewise in finding “ the devil in the details ”, I knew there was plenty of Geometry involved and definitely much more Physics !
I started studying and researching how Newton’s Laws could maybe have an application regarding the precision and the conversation of the momentum .
http://en.wikipedia.org/wiki/Momentum
or
And how they are related to force
Relation to force
If a force F is applied to a particle for a time interval Δt, the momentum of the particle changes by an amount
In differential form, this gives Newton’s second law: the rate of change of the momentum of a particle is equal to the force F acting on it:
If the force depends on time, the change in momentum (or impulse) between times t1 and t2 is
The second law only applies to a particle that does not exchange matter with its surroundings,[4] and so it is equivalent to write
so the force is equal to mass times acceleration.
and through an inelastic collision how
the measure of the inelasticity of the collision ( coefficient of restitution CR, ) is defined as the ratio of relative velocity of separation to relative velocity of approach. In applying this measure to ball sports, this can be easily measured using the following formula:
I went on and on and on without a solid outcome but I knew I was close : )
I never neglected Gann’s theories who happened to be one the most successful traders of all time and I suggest everyone to study Gann , but in order to understand deeply and become “1” with his theories, one has to study Philosophy , basic Mathematics and Physics.
Without those three sciences at least, you will not be able to come across with his readings …
W.D Gann was not unknown to me. Since I was embedded from my childhood with circles and cycles , it was not difficult for me to understand that since one calendar year has 365 days and the circle has 360 degrees , there was a relation to those two and I could apply geometry in there : )
Let me show you how useful this may be and how we can apply it
(dividing the circle into 4ths and 8ths ) in a chart .
We will have to recruit a theory that divides “ the Range into Two Squares of the Circle”. It’s called the D8 theory .
In this theory we will take the high of Nov 09’ : 1.5142 => June 10’ : 1.1875.
This is ONE circle and inside this circle we put two squares trying to examine the major turning points in what degrees of the circle correspond.
You may have a more “explanatory visual approach of the squaring” in the monthly chart below.
After the low of June 2010 it started moving up with momentum to touch the 75% of the initial movement : the 270 degree angle of the circle which is VERY important. Then it hit the 37.5%
which was the 135 degree angle and then it levelled up to the 87.5% : 315 degree corner.
When it hit with the strong bearish momentum the 50% level which is THE MOST IMPORTANT along with the 62.5%, it bounced back , hit the 62.5% almost hit the 75%, and the month eventually closed under the 62.5% retracement level. Then it started continuing its’ bearish momentum and it hit the 25% : 90 degree angle, then back to 50% etc…
So our target now by Nov 2014 it is the 25% : 90 degree angle valued at 1.2680 => 1,27.
Of course it is coming with a heavy momentum from August and it may drop a little lower to 1.26 maybe 1.25. We may use the Newton’s law, I mentioned above to calculate the exact momentum.
It is very important to hit the 90 degree angle: 25% retracement level , because only then it will
gain momentum. It is like hitting a tennis ball in the ground. If it doesn’t hit it , it will not bounce
up ! It will be something like hitting it in the water. Of course it will levitate instead of bouncing
The following chart is again the Eur/Usd Monthly and the last candle is the September candle.
Notice how harmonically the security moves into those lines.
This is what has happened so far which verifies the above theory :
Eur/ Usd Monthly Chart : Last monthly candle Oct .
Gann talked a lot about the vibration that stocks produced and he had formed a formula on how to accurately predicted the EXACT tops and bottoms of the stocks.
In his book “ The Law of Vibration ” he refuses to reveal the secret with the following statement :
“It is impossible here to give an adequate idea of the Law of Vibration as I apply it to the markets, however, the layman may be able to grasp some of the principles when I state that the Law of Vibration is the fundamental law upon which wireless telegraphy, wireless telephones and phonographs are based. Without the existence of this law the above inventions would have been impossible”
However Gann himself did not discover the “ Law of Vibration ”
That was Nicola Tesla, who was approximately twenty years older than W.D Gann and Gann studied him but never mentioned him…
“ If you want to find the secrets of the universe, think in terms of energy, frequency and vibration”
Nicola Tesla.
http://www.youtube.com/watch?v=wvJAgrUBF4w
Nicola Tesla’s personalities come once in every two or three centuries. I will not engage in praising him because you can read all about him and his inventions.
There are plenty of things that we admire in life . We may admire a woman with a beautiful face and Fibonacci curves and evergreen personality like Rachel Welch who celebrated her 74th birthday on Sep 5th , or Arnold Swartzenegger’s physique when he acquired the first Mr Olympia Title at the age of 23.
We may admire the Mona Lisa painting and sit in front of it for hrs ,
We may admire a beautiful landscape ,
Or a melody …
For a divine result we need to overcome ourselves and look beyond what we see.
The Greek Philosopher Plato said “ Everyone has vision , but a few have perception”.
The way we see or read numbers or letters is not what they show us : )
After combining sciences along with art and character , I have eventually found a formula that can predict with absolute accuracy the top or bottom of every security…
We will take as reference point the low of Eur/ Usd of Feb 3rd @ 1.3475 to calculate the high of the year Which occurred on May 8th @ 1.3992
On March 13th it topped on 1.3965, BUT 1.3965 is NOT 1.40 !!!
So the market dropped again on April and formed a bottom on April 4th : 1.3671 and IT HAD to reach to 1.40 target because it all based on science !
Now… watched what happened !!!
On Monday May 4th we had the entire schedule for the week and the announcements.
http://www.federalreserve.gov/newsevents/speech/2014speech.htm
On Tuesday , May 6th , Janet Yellen was speaking.
On Thursday May 8th Mario Draghi was going to make an announcement http://www.youtube.com/watch?v=W3G9luRX3Hc
So on Monday the market was consolidated waiting for Yellen’s announcement to support the US$.
And when she finished her speech and did not mention anything related to the $USD, everyone start buying like crazy because it was obvious that on Thursday Draghi would support the Euro !!!
And so he did … !!!
Everyone start ordering long positions more and more with a huge momentum …
BUT…
When it hit the 1.3992 level, the US banks started shortening it and by the end of the day it was down to 1.3830…
This is how big players do it because knowledge IS POWER, and no matter what they say…
SIZE ALWAYS matters & the House ALWAYS WINS : )))
God Bless you All,
Alex Antoniou
CEO, Co Founder
Nexxus Partners
