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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: Staff who wrote (1601)	11/15/1997 3:07:00 PM
From: Cage Rattler	Respond to of 5676

Staff: More than a little contemplation is required for your challenge. If I had the solution, I'd be living in a warmer climate. Then again I spend geometry class trying to trisect an angle - learned a lot, but suffered a Pratt fall in the process. My initial response to your coin toss question is not original, and follows the maturation of odds folly. Ruling out such stuff as the coin landing on it's edge, the odds on any single toss are 1/2. However, can we rightfully assume randomness under real circumstance or only approach it theoretically by increased sampling? The probability in real-life market situations seem beyond anyone's understanding. Herein may lie the strength of the "contrarian," who gains an unrecognized "payoff edge" betting against the heard. I am not a mystically oriented person. I admit total ignorance of astrological matters. Some market texts I have read allege that horoscopes have influenced investor decisions since, and probably before, J. P. Morgan and Livermore. I can not dispute the value of such mystical concepts, but profess my agnostic attitude and therefore an inability to debate using such presuppositions. After considering your reply I am questioning the assumptions echoed in my posting to you. Perhaps the trends we observe are illusions, and little more than random combination misinterpreted like 8-heads in a row during coin tossing? I hope I'm better at picking random socks. Your challenge cought me off guard! More to come. Ciao, Ted

To: Staff who wrote (1601)	11/15/1997 4:02:00 PM
From: GROUND ZERO™	Respond to of 5676

Hi Staff, I think Gann was truly the only one who was able to peg the markets as well as he did. I use Gann to time the DOW and bonds and have been successful over the years. I use his time corrections as well as price corrections, Gann lines, and I also use median lines which have been very reliable in picking market turns for the DOW and bond markets. I bought the bonds a few months ago right off a median line. And the DOW rallied off a median line a couple of weeks ago. Those lines are obvious when you know how to calculate them, and if you're interested I'll gladly show you how, to make my point. It's easy to do. Now, as far as your coin flipping puzzle is concerned, that is a very different species of mathematics. Of course, the next flip is always 50/50. If you flipped the coin 10 times and landed on heads 8 out of ten, the hidden question is what is the probability of getting 9 heads out of 11 flips. That would not be 50/50, but exponential. Two separate questions and mathematical problems. The reason the coin question is a different species of question than those about the markets is because the coin flip is not influenced by human emotion and mob psychology. These markets are driven by the masses' perception of what supply and demand is. Fear and greed are the emotions that drive and distort those perceptions. This is what is being measured on the charts. These factors have little to do with the flip of a coin. Mob psychology and mass behavior is quantifiable and, therefore, predictable. With the use of Gann's time lines and median lines, a market trader has the clear advantage of knowing in advance when the market has the greatest opportunity for a turn in sentiment. Have a great weekend. GZ

To: Staff who wrote (1601)	11/15/1997 5:02:00 PM
From: Cage Rattler	Read Replies (3) \| Respond to of 5676

Staff: Follow-up; not much change in thinking. Rephrasing your question - given ten consecutive coin tosses and the first eight consecutive tosses being heads, what is the probability of the ninth toss turning up a tail? Assuming true randomness, the chance of a tail on toss nine is exactly the same as that of a head, or «. The attractive fallacy, or maturation of odds, follows the "logic" that since the probability of eight consecutive head tosses is so low (1/2) raised to the 8 power) a tail must be getting more probable. Not so, at least in probability theory. Nevertheless, this concept seems applicable to investment strategy. When a gambler/investor bets, based upon the maturation of odds fallacy, and is willing to pay for and assume unfavorable odds, the opposite investment position will payoff over time. Ciao, Ted