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To: smolejv@gmx.net who wrote (52423)9/12/1998 2:16:00 PM
From: AurumRabosa  Read Replies (1) | Respond to of 58727
 
Fourier analysis is absolutely NOT a wonder weapon. It's simply curve-fitting of past data with a belief that the same pattern will persist into the future. Some believe that human emotions taken in the aggregate may follow natural laws that would make them predictable as in your example of tide analysis. I'll wait for the proof but I do believe that the "Madness of Crowds" is a very real phenomenon. My only expectation from the use of Fourier analysis is as a tool to help set reasonable bounds on the extent of a market move from now to expiration in order to find option trades where I can sell options that are over-priced at strikes that are beyond the reasonable reach of Mr Market and so will expire worthless to the benefit of my account.

I assume you're referring to Georg Cantor (1845-1918) and Karl Weierstrass (1815-1897). Do you have some specific references in mind? I'd like to learn more.