Unveiling the Exponential Nature of Time in Stock Market Patterns

1. Market Technicians Association, Inc. 61 Broadway, Suite 514. New York, NY 10006 Web: www.mta.org Phone: 646-652-3300 Fax: 646-652-3322 The 2011 OutlookMukul Pal, CMT

2. Idea

3. Vilfredo Pareto(1848-1923)Father of Microeconomics Who saw the curve?

4. 80-20 Price and Time 20% Time, 80% price change 80% Time, 20% price change

5. Clustering

6. Exponentiality Exponential Symmetry

7. Sub divisions Counting Elliott did not know Fibonacci 5 3 e 1 4 c d 2 a e b c d a e c b a d b

9. Clustering in Time

10. 80-20 Price and Time 20% Time, 80% price change 80% Time, 20% price change

11. Who saw order in Time?

12. Tony Plummer’s Triad

13. Who saw the curve in Time?Orpheus Time Hierarchy

14. Orpheus Time Hierarchy

15. Orpheus Time Hierarchy

16. Figure 1. Rate of change for SIF Oltenia

18. Analysis When we look at time duration for the 23 stocks we find most distributions to have an exponential nature. Our results are based on analyzing ≈ 5000 time duration data points representing rate of change inflexion around a mean value of 1 over the daily data ≈ 50,000 price data points for the period January 2000—October 2010. Figure 2 displays the ascending sequence of the time duration data. We observe that the distribution has an exponential form and decay. P(g) ~ e−βg With β = 2.4 ± 0.037

20. Application

21. Market Influences • News • Fundamentals • Demand and Supply • Technical Analysis • Sentiment

22. Top 10 – 1D Romania

23. Top 10 – 5 day India

24. Pattern • Chance • Where is the pattern? • Is curve a pattern? • Is the curve mathematical?

25. Top 10 – 5 day

26. A week • Umm.. • Ok I see it • It’s a curve • It looks similar on two degrees of time • Did any news came this week?

27. Top 10 – MTD

28. Few weeks • It’s repeating • A similar curve. • There was news, demand, supply • Technicals and fundamentals

29. Top 10 – 6M

30. Few months • wow • How is this happening? • Nothing changes it • News, demand, supply, technicals, fundamentals • Mysterious force

31. Top 10 – 1Y

32. Year • Pattern continues despite all market influences.

33. SIF’S

34. Region, Sector • Pattern in the region • Pattern in a sector

35. DOW30

36. Region, Sector, America • Pattern in the region • Pattern in a sector • Pattern in America

37. AT&T

38. Region, Sector, America, in time • Pattern in the region • Pattern in a sector • Pattern in America • Across degrees of time

39. S&P500 – 1d Southwestern Energy Company (SWN.N) Citrix Systems, Inc. (CTXS.OQ)

40. S&P500 – 5d Host Hotels & Resorts, Inc. (HST.N) Coca-Cola Enterprises Inc. (CCE.N)

41. S&P500 – MTD Marathon Oil Corporation (MRO.N) Coca-Cola Enterprises Inc. (CCE.N)

42. S&P500 – 1M Carnival Corporation (CCL.N) Coca-Cola Enterprises Inc. (CCE.N)

43. S&P500 – 3M Genzyme Corporation (GENZ.OQ) Micron Technology, Inc. (MU.OQ)

44. S&P500 – 6M Teradata Corporation (TDC.N) Office Depot

45. S&P500 – YTD Genzyme Corporation (GENZ.OQ) H&R Block, Inc. (HRB.N)

46. S&P500 – 1Y Dean Foods

47. What is this pattern? • It’s a curve • Exponentiality • Small Big gains • Small Big loss • Lot of sideways action • It’s a cycle • Show me the cycle?

48. Region, Sector, America, in timeall over • Pattern in the region • Pattern in a sector • Pattern in America • Across degrees of time • Across universe of stocks

49. What does the curve mean? • Performance is ordered • Performance is cyclical • Performance is cyclical across time frames • Stocks move up and down in performance • They outperform and underperform in an ordered sequence • The sequence is a pattern of Time • Time is exponential • Time is the real price

50. Rankings are shifting cyclically