Part 1. One Hundred Years of the All Ords Re-Indexed To Pi^(N/2)

What This Chart is Telling Us.

1. Is that every major market boom high since the great depression is equal to Pi^N times the first high after the great depression.

2.They are in a precise geometric sequence of 74.5 * 3.141^N since March 1937 Proof Here Data Here

3. This is the last thing you would expect a random walk system to do, it is however the first thing you would expect from a wave function.

4. Therefore we should be looking at the data in polar form.

5. Instead of Cartesian co-ordinates which distorts the charts in the same way a Mercator projection stretches and compresses the sizes of the continents. 

6. Financial markets are not a random walk system they are telecommunications networks.

7. Prices are information transmitted electronically, therefore they obey the same laws of wave physics as electromagnetic energy ie: Photons and Electrons.

8. Money is light mathematically they are the same thing.

9. The only way to find a pure solution to this problem is therefore in terms of a three dimensional wave function on the complex plane.

10. That returns a well defined scientifically reliable signal in real time.

ASX200 Weekly With Signal Processing.

Part 2. Black and Scholes Blunder.

US500 With Parabolic Distribution.

1. Why Black does Scholes keep blowing up banks and brokers.

2. Because they made an assumption and did not test it.

3. Well not until LTCM was leveraged out to the Twilight Zone at 33:1.

4. Financial trends are not normally distributed, they are parabolically distributed.

5. Which is why so many pricing formulas fail.

6. Because they are based on the wrong distribution curve.

More: Markets as Wave Functions.

Part 3. Directional Volatility Index.

More: Directional Vix Daily Charts.

Directional Volatility Calculations.

1.When we calculate a regression we take the square root of the square of a number.

2. We do this to remove and thereby throw away the directional component of the distance from our regression line to the value.

3. I stress throw away in mathematics this is never a good idea, we are throwing away the value we need to do any directional analysis.

4. If you handle this as a complex number and do your calculations accordingly and then return to the Cartesian plane.

5. An entirely new set of values emerges that can be used to develop a steady state process control solution.

6. With a delta of one regardless of the direction of the major trend.

7. The signal  trace of a human voice is indistinguishable from a market, after all they are really just conversations about prices.

Human Voice Sample.

SP500 Daily

More: US500 Daily Charts.

UKOUSD Weekly

US Dollar Weekly

XAUUSD Weekly

XAGUSD Weekly

Part 4. Summary Points.

1.The definition of a working scientific theory is the ability to predict and explain future observations.

2.There is a fatal error in the way we think about markets and money, it is not a random walk or a Brownian motion system.

3. It is information transmitted across a telecommunications network, therefore it obeys the same laws of physics as electromagnetic energy.

4. Money is light they are the same thing, which is seen as Moiré type interference patterns in normal charts.

5. Markets are not continuous, they are instantaneous and all prices are artifacts of something that has happened. 

6. Money has no real world size or physical dimensions, this puts it into the domain of quantum probability.

7. The mathematics of finance and physics are mutually inclusive, everything is subject to the laws of mathematics.

8.To discover the exact relationship between finance and physics is just a matter of asking the right question.

9. The right answer can be found here Laplace Compound Interest.

Additional Reading: FinancialInterferometry.com