Space time experiment in silver

I think lots of people have wondered whether to use normal hours trading data only or whether one should also include the after hours trade session data.  The problem is that after hours data is not presented very well for all markets.  For example, metals trade around the globe and thus around the clock but these trades do not appear in the daily charting data of common chart data sources such as TDAmeritrade, Yahoo, or Google.

The threat for a chartist is of course, what happens when I'm not looking at the chart?  What happens when others are trading it and the US is asleep?  How can any analysis that we do during our working day be valid if the commodity is traded as we sleep?  Won't the chart change?  Won't it mess up the count?

The new theoretical answer that I'm postulating today, and this is purely from a layperson perspective (albeit one with a fairly analytical mind, a passion for charting, and thousands of hours of documented practice), is that yes the chart will change overnight but no it won't matter to the local observer's wave count.  I believe that the explanation can be found in the fractal nature of the charts.  I believe that this feature enables multiple universes of "user spaces" to co-exist overlaid onto a universal time plot.  In essence what I'm suggesting here is that unobservable global occurrences in the universe, for all intents and purposes from the point of the local observer, effectively did not occur even though in fact they did physically occur.  And yes, this is a stock trading take-off the old "if a tree falls in the forest and nobody was there to hear it did it make any sound" thought experiment which essentially links perception of an event to its reality to a given individual or set of individuals.

Before getting deeper into the theory I'm proposing, let's see if this idea passes the sniff test.  First, at a very very high level: Imagine that a supernova explodes on the other side of the universe and because of its distance from us and our limited sensory capabilities we can not detect it.  From the perspective of God, it definitely happened.  But we here on Earth do not have that kind of vision and, since it is beyond our ability to perceive much less observe, not one of the billions of people on Earth will think it did.  Our reality is effectively limited by our ability to perceive and observe.   At this high of a level, this "sniff test" is simply my own restatement of the lengthy wiki link posted above.

Taking these high level ideas down into trading, metals are the perfect testing ground because they do in fact trade with high volume around the clock.  I use pmbulls.com to track it but their charting tools are very limited.  There are A LOT of Elliotticians out there who have called significant turns in metals prices nearly to the penny based on using only the trading data available to them during their trading hours.  If the 24 hour action were to screw up the wave count of any specific region each night then EW would have a very bad rap for metals.  But it doesn't.  It has an excellent rap.  And the sniff test thus says that, in some way, the global trading action does not really matter to the local wave count.  Those global events certainly happened in the time domain of the local chartist because there is only one universal time domain: the 24 hour day.  But they did not occur in the locality (space domain) of the local observer.  Thus, real overnight ooccurrences do not show up in the local (chart space)-time domain and thus they do not matter to the local observer.  So yes, it really happened but no it does not mess up the chart.   The fractal nature of the charts accounts for it.

I often like to map ethereal concepts into real life.  So, many distinct herds of of the same species of wildebeests live and roam in Africa.  They each have the same basic requirements of life but they live in slightly different terrain with different leaders and different herd members.  In aggregate, they behave in self-similar way but out of phase in some way that is controlled by local factors observable to each individual herd.  Each of them will have their own routine (wave count) even though they all share the same actual time space.  So the many herds exist as galaxies within a larger species universe.  Each one lives in its own space but with shared time.

From the point of an observer in any given herd there appears to be no interaction between the herds but if one were to aggregate all the herds of a given species, a wave count of a higher order would fall out of it.  So the wave count of each herd must somehow be contained within the the top level count, even if the only thing each herd can perceive is its own count.  That's where fractals come in (self similar patterns at different degrees of observation).  The entire universe is controlled by them which is why the charts inescapably conform to the Elliott wave principle.


While these are nice theories, and while they do pass a logical sniff test, theories were meant to be tested.  So let's test it on the silver chart.  By the way, if this pans out then, while far from being definitive proof of higher level truths, it should be considered a valid data point for the higher level tree falls in woods conclusions (which I think is interesting because those postulating these theories don't seem to offer much evidence, only thought experiments...).

So here goes...

I modeled a good 5 wave down count in silver yesterday that seemed to match the 5 down count of the miners.  I acted on that chart model yesterday AM and was rewarded.  Being that the new rally was as yet unconfirmed, and due to the gap trap that I saw in the charts, I bailed out on the action late in the day when support broke and then watched and a-b-c play out and so I jumped back in.  All of this is well documented in these pages over the last 48 hours.

So I went to bed early and woke to go to work early.  Upon waking, I took a snapshot of the silver chart with the idea of writing this post.  That chart is shown below.  Now, this is the 24 hour chart.  It is similar to but at one degree of observation higher than my TDAmeritrade SLV chart.  In other words, the prior charts on my blog showed only the local action whereas the chart below shows the universal action. 

Whereas my local charts showed 5 waves up of a new silver rally had clearly begun followed by a 3 wave pullback to wave 2, the global chart clearly shows that the decline had NOT finished at the global level.  In fact, the chart is very clear!  It's a 4th wave triangle, plain as day.  But this is not visible from my limited, charting space of US silver trading even though all silver trading shares one time domain.

My local chart believes that waves 1 and 2 of a new rally occurred.  The global trading data showed that in fact silver plummeted to a lower low over night in global trading.  If my theory is correct, we should STILL open higher tomorrow than today's US close.  US traders (and US chartists who sleep as I type this) will be oblivious to the overnight smack down to $15 simply because it will not appear at all on our localized charts.  The wave count that I modeled yesterday will be unaffected by this overnight action.

While time will certainly tell on this experiment, the concepts I'm bringing up have broader implications to the thinking person:

•  Due to the fractal nature of the universe, universal concepts can be inferred by comparing the action between global and local chart domains.  In fact you don't even need to compare global to local.  You just need to compare between two different degrees.  In fact, this is exactly what we do when we look at the chart at different time scales (i.e. the 3 minute candle vs the 120 minute vs the weekly).
• The waves of different observation spaces are like waves on the ocean, sound waves and radio waves.  They pass right through each other without affecting the progress of each other BUT effects can be noticed (such as wave addition and subtraction) if you observe from a high enough level.  The waves resulting from these multi-domain interactions will all appear normal and predictable by the EW chart of any given sub domain.
• If a person has knowledge of the top level chart-space time then he will be better able to predict and understand the chart action of the subdomains.  For example, knowing that the high level domain is in a 3rd wave will certainly help someone with that visibility expect that the subdomain chart which is entering a 3rd wave will be larger than expected because we know that nested 3rds are more powerful than unnested 3rds.   How many times in these pages have I pointed to huge gaps that occurred in 3rd of 3rd of 3rd space?  This happens because waves of the different trading space domains add up to create rogue waves using exactly the same conceptual physics that create rogue waves on the ocean.  Likewise, some 3rds are muted, and that is likely because they are out of phase with some other trading domain which provided a trough during the local 3rd.  This hidden but real interaction with other domains goes a long way toward explaining why the size of 3rds can be so wildly variant.  Importantly, the low level observer will know that a powerful 3rd wave is coming but he cannot tell how powerful it will be.  So it seems that the only information missed by observing at lower degrees is magnitude.  Ignorance of the existence of the higher degree waves is what gives people the perception of chaos in this matter.
• Since the perception of reality is limited to the ability to observe, and since perception of broader realities enables more effective decision making, all individual traders are screwed once real AI begins being used because it will be employed by brokers who have broad observability of each of our trades.  AI basically makes gods of the brokers.  At some point, the only winning move will be not to play.
• It is interesting to see real data applied to ethereal concepts.  Seeing the proof of it play out in a predictable fashion has to suggest that things are not chaotic as people seem to believe; apparent chaos is thus a function of one's ability to perceive.  Since the inability to perceive is actually a long winded way of saying "ignorance", apparent chaos must be a function of ignorance.  Not just in stock charts, folks.  In everything.
• Predictability argues for a universal order which, as an engineer who understands that truly random systems either never work or self destruct pretty quickly, I have long believed to exist.

 It will be interesting to see how the silver experiment plays out tomorrow!