God's Patterns in Financial Markets

Fallacies of Wave Theories and Fibonacci Numbers

The Financial Chaos Training Academy (FCTA) is excited to present this NEW insight into how the financial markets are structured by the Almighty God  in the hope that this will help you to avoid  the misleading notion that financial markets can be predicted or forecasted by some man-made theories such as Elliot waves, or some sort of fanciful mathematical equations based on time series analysis, Gann theory, Cycle theories, Fibonacci and geometric theories and now quantum physics and neural network analysis.

 Everyone believes that financial markets are under the influence of some sort of mysterious gravitional forces or natural rhythm created by the Sun, Moon and Stars that triggers giant waves at random which causes market turbulences every now and then without warning. 

The most well known theory on stock market cycles with specific reference to rhythms of nature is the Elliot Wave Theory created by accountant /mathematician Ralph Nelson Elliot in 1939. Inspired by the Dow Theory, he found correlation or similarity between fluctuations of the stock markets with the rhythms created by the ocean waves and concluded that the movement of the stock market could be predicted by observing and identifying repetitive patterns of ocean waves.

The crux of Elliot Wave Theory and all other highly acclaimed market forecasting techniques lies in identifying this rhythm of nature that market follows. One thing that is unclear is that Elliot did not say how he came to the conclusion that market rhythm (s) is influenced by rhythm (s) found in other things of nature but not inherent in the market itself. 

A more profound problem is how do we observe, measure or identify this so-called rhythm of nature that controls or influences financial markets? To overcome this problem, either Elliot or his followers later couched the solution into another unproven theory of nature’s rhythm: the “Fibonacci Numbers”

The concept of Fibonacci number series was first invented in 1202 by Italian Mathematician named Leonardo Fibonacci (also known as Leonardo Pisa) who during a research on rabbits first observed a particular numerical sequence about the breeding habits of rabbits. The Fibonacci sequence is generated by adding the previous two numbers in the list together to form the next and so on and so on, e.g.

1, 1, 2, 3, 5, 8, 13, 21, 34, 55

And so what attracted traders to the Fibonacci sequences of numbers? 

There are certain repeating ratios within the sequence but only occurring after the SEVENTH sequence. For example, from sequence 21, (13 being the Seventh sequence) you can divide any number in the Fibonacci sequence by the one before it, and you will always have an answer close to 0.618. For example 21/34 or 34/55, will 0.618. Similarly, you can reverse the division and you will always have an answer close to 1.61803. This is known as the Golden Ratio, and hence Fibonacci's sequence is also called the Golden Sequence.

Unbelievable though it might sound, it is the interpretation of the occurrence of these ratios and their applications to explain why rhythms occur in nature that is gravely wrong. Though, at first it look fascinating to see how the ratios 0.618 or 1.618 repeat themselves  inside Fibonancci Numbers, nevertheless these repetition only occurred after the Seventh Number in sequence. If we were to take the numbers in the series as market periods or cycles, the repetition will not occur or reverse based on the Golden ratios but after the SEVENTH NUMBER. What this implies is that market will only repeat itself at every SEVEN period in the series. This period can vary from nanoseconds to minutes, hours, days, weeks, months and years depending on the definition of how long the period lasts. There is no need to find the so-called Golden ratio, because we know these ratios (or signs of repetitions) will only start after every SEVENTH number.

This is also the root of the problem of why traders are failing to accurately forecast financial markets using Elliot Waves or Fibonacci Numbers. There is nothing magical or new here! This is the way things are made by God Almighty.

Genesis 2:3  And God blessed the seventh day and made it holy, because on it He rested from all the work of creating that he had done.

Why would Market Rhythm Repeat at Interval of SEVENS?

The number SEVEN is found in every creation and is so woven into every fabric of both living and non-living things God Almighty created.  The Bible which was written by 33 different people over a period of 1500 years shows how God uses this number to control activities of mankind. Those authors couldn’t have conspired to given prominence to the number SEVEN in their works because they were scattered throughout various countries of the world and from widely different backgrounds.  

Bible scholars have also found that seven occurs about 187 times in the Bible (41 x 7), the phrase "seven-fold" occurs seven times and "seventy" occurs 56 times (7 x 8).  In the book of Revelation alone there are over 50 occurrences of the number seven e.g. there are seven golden candlesticks, seven letters to seven churches, a book sealed with seven seals, seven angels standing before the Lord with seven trumpets, seven thunders and seven last plagues.   All these cannot be mere coincidences!

Despite the importance of the number, it is conspicuously missing from the Fibnonacci Number series or given any prominence, except the Golden Ratio starts from after the Seventh sequence. Was this a chance or attempts to give prominence to the work of man instead of God?

Some Examples of How God uses Number 7 in the Bible:

Genesis 7:2: “Take with you seven of every kind of clean animal, a male and its mate, and two of every kind of unclean animal, a male and its mate,”

Exodus 20:10: but the seventh day is a Sabbath to the LORD your God. On it you shall not do any work, neither you, nor your son or daughter, nor your manservant or maidservant, nor your animals, nor the alien within your gates.

Exodus 23:12: "Six days do your work, but on the seventh day do not work, so that your ox and your donkey may rest and the slave born in your household, and the alien as well, may be refreshed.

Genesis 41:29: “Seven years of great abundance are coming throughout the land of Egypt,”

Genesis 41:30: “but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land.”

Zechariah 4:10: "Who despises the day of small things? Men will rejoice when they see the plumb line in the hand of Zerubbabel. "(These seven are the eyes of the LORD, which range throughout the earth.)"

Matthew 15:36:  “Then he took the seven loaves and the fish, and when he had given thanks, he broke them and gave them to the disciples, and they in turn to the people.”

Matthew 15:37: They all ate and were satisfied. Afterward the disciples picked up seven basketfuls of broken pieces that were left over.”  

Most life operates in a cycle of SEVENS. God formed man of the dust of the ground – that fact is found in Genesis chapter 2 – Verse 7 (2:7); science confirms the human body is made of the same 14 elements (2 x 7) found in an average handful of dust. Also, changes take place in the body every SEVEN years. There are SEVEN bones in the neck, SEVEN bones in the face, SEVEN bones in the ankle, and SEVEN holes in the head. Most births by mammals are also in multiple of SEVENS. The hen sits three weeks (21 days); the pigeon two weeks (14 days); after having laid eggs for two weeks and the list goes on almost forever.

In the Scripture, seven symbolizes completeness or perfection of God’s activities – this is the rhythm of human activities or market activities as we are created in his own image. Genesis 2:3  And God blessed the seventh day and made it holy, because on it He rested from all the work of creating that he had done.

As we can see God never made this number to be a secret code to life. He even decreed that we should honour it especially the SEVENTH DAY in all our activities.

God's sacred Rhythm Pattern of Time

The FOURTH thing God made was the "solar" bodies to be the "measure" that will divide the Light from Darkness, into 24 hour day periods, seven day a week, 30 day months and 4 seasons and 365 days a year.   

 

How God did ensure that we conform to these arrangements?  It is important to know all the implications of the 24 hrs/ 7 days a week arrangement for economic activities or cycles.  But because of the vastness of the implications, let us focus attention on few examples:

1.  Circadian Clock 

The circadian clock regulate for example, activities of human beings - also called biorhythm  which is roughly a 24-hour cycle tailored along with the spiral revolution of the earth around its axis. Apparently this clock is also found to be present in other living things including plants, animals, fungi and cyanobacteria. What this implies is that is erroneous to use say biorhythms of rabbits to infer human rhythms. Every 12 hours human activities slow down to rest before resuming again the next day. Besides, the daily pause of human activities, medical science has it that the heartbeats of human beings also slow down every seven days as if it were in accord with the seventh day of rest proclaimed by God in the Book of Genesis.

2.  Spiral Patterns and Motions 

The patterns and motions of the universe, the galaxy, solar system, and planets all follow whirlwind or spiral pattern. Of importance here is the motion of the Earth, which travels at a speed of 108,000 kilometres (67,000 miles) an hour as it spin around its axis. This in turns causes other things (wind systems, bodies of water, plants, and human actions)  on the surface of the Earth to exhibit spiral or recursive patterns either in their motions or arrangements.

This is why spiral patterns are found in various "family trees" and even on the arrangements of leaves and seeds around their three trunks. So, the most common examples that spiral look of sunflower seeds follows Fibonacci sequence is simply another misinterpretation as this type of arrangement is not peculiar only to plants or sun-flower seeds but to all other things God created in the universe.

  

For financial markets, human actions that triggers buy and sell are not visible to human eyes like ocean currents, but nevertheless,  they also follows this recursive patterns commonly referred to as market waves. They do so not because they are influenced by other things but because all things both seen and unseen conformed to this spiral patterns of Earth in motion. This is basically the cause of rise and fall in the market. Market actions been basically spirit activities like winds are unseen to human eyes and this makes people to think that markets actions are influenced by some astronomical power other than how it was designed to function.  

3. God's Law

God did not only specially built in circadian rhythm (24-hour clock) into our body and causes motion of earth to revolve around itself but He also enacted laws to regulate our economic activities to be in harmony with His pattern.

Remember the sabbath day, to keep it holy. Six days shalt thou labour, and do all thy work: But the seventh day is the sabbath of the LORD thy God: in it thou shalt not do any work, thou, nor thy son, nor thy daughter, thy manservant, nor thy maidservant, nor thy cattle, nor thy stranger that is within thy gates: For in six days the LORD made heaven and earth, the sea, and all that in them is, and rested the seventh day: wherefore the LORD blessed the sabbath day, and hallowed [sanctified] it. Exodus 20:8

And thou shalt number seven sabbaths of years unto thee, seven times seven years; and the space of the seven sabbaths of years shall be unto thee forty and nine years. Then shalt thou cause the trumpet of the Jubilee to sound on the tenth day of the seventh month, in the Day of Atonement shall ye make the trumpet sound throughout all your land. And ye shall hallow the fiftieth year, and proclaim liberty throughout all the land unto all the inhabitants thereof: it shall be a jubilee unto you; and ye shall return every man unto his possession, and ye shall return every man unto his family.

As God ceased His Work on the Seventh Day, so he also passed laws to make sure that people adhere to the Seventh Day and sanctify it unto God. This set the basis of market rhythms or market cycles. This is the origin of the seven-day week now common to the entire business world. Thus, in general, market rhythms will pause every SEVENTH day, and resume on the EIGHT DAY. The Eight day mark the start of a new birth and of course a new market 

As we can see, economic cycles can be something that last for 24hours or less or in sequence of every seven days, or seven  weeks and up to 365 days for one complete revolution; and thereafter with a pause at a sequence of every seven years, and then the Jubilee year.

Whether we like it or not, through enforcing our daily /weekly activities to run in sequence of SEVENS, God is undeniably present in all of human activities (rhythms).  As people engage in different human activities, including financial trading, our actions are continually judged in the face of God, we are sustained by God, and our thoughts are reflections of God's thoughts either obediently or disobediently 

Thus the structure of human thoughts, the structure of the world markets, the structure of the actions and reactions generated, and the structure of the resultant market waves, are all under the  control of God and conformed to His designed of 24hrs/7days a week time structure. 

 Isaiah 45:12

       It is I who made the earth
       and created mankind upon it.
       My own hands stretched out the heavens;
       I marshaled their starry hosts.

This clearly overthrows any other assumptions that market rhythms and cycles are based on some sort of Fibonacci sequence, or any other man's conjecture or our own understanding. This also overthrows all man's claims of our abilities to predict the market cycles othe than  relying on God's guidance  Acts 17:28 proclaims, "In him we live and move and have our being."

In conclusion, God rules all things (e.g., Ps 103:19; Dan 4:34-35; Eph 1:11; Lam 3:37-38).  All things (including financial trades) are uniquely created by God to operate for specific numbers of hours per day/week/year, and each with its own unique rhythms as well.  Human activities like financial trades exists because God, using created means, has brought people together into existence and in agreement to collectively exchange trades.  Moreover, God controls the actions and thoughts of each human being who engages in such activities, whether their intentions are for good or bad when measured by God's standards.  

Related Links:

Fallacies of Wave Theories and Fibonacci Numbers

How God Brought Order out of Financial Chaos

Self-Similarity Behaviour of Financial Fractals 

Fractal Sensitive Dependence to Initial Conditions and Butterfly Effects

 

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