Maybe the Markets are Perfect After All
Continuous proportions are explained in the Proportion, Proportion, Proportion section under General Concepts. They are among the most important tools for decoding the markets. Below is an excellent example of a continuous three term proportion.
The number of days from the 1962 bottom to the 1974 bottom is 3093.
The number of days from the 1974 bottom to the 1982 bottom is 1984.
The number of days from the 1982 bottom to the 1987 peak is ?
1984/3093=0.64145
0.64145 x 1984 = 1273
19842/3093 = 1273
A is to B as B is to C
1273 is to 1984 as 1984 is to 3093
The figure below illustrates the above relationships on a graph covering the time period from the 1962 bottom to the 1987 peak. It illustrates that the two "time distances" between the three major bottoms, 1962-74-82, bear the same relationship to each other as the time distance between the last bottom, 1982, and the 1987 peak bear to each other to the day, covering a period of 25 years & 6350 trading days!
