Research Articles

The Oct low we talked about held against all odds. A strange time cycle held against all conventional knowledge, which failed. And now that 2008 comes to end, we can sum up a few gaps in generational thinking which concerns us as a society and as economic beings. On one hand, the experience is overwhelming because the ideas overlap most areas of study viz. economics, finance, history, psychology, mathematics, sciences, time cycles and art. But on the other, it’s no short of a revolution in research to be able to comprehend, interpret and derive applied predictive tools from such a vast scale of research areas. It may take another generation for us to look for convergence in ideas. And there are things we may never understand. But then it’s the quest that leads to solutions and differentiates one society from the other.

Conviction is a strange thing, it tests you, your determination, your homework, your skill, how individual you are and how patient you are wearing the fool’s crown. It does one more thing, it makes you extremely individual, probably alone (when you are right), screaming sell at a top and buy at a bottom. But then markets are strange beings, the top is followed by another top and bottom by another low. The line between conviction and foolishness becoming blurred every time the prices move against you

This is a harsh reality, but masses don’t understand cycles and the uncanny asset linkages. The fact is that we at Orpheus too are also scratching the surface. Though there are market timing models, timing the market in future with a small time window of a few days, is a skill we look up to. As of now, we know only a few who can do this consistently. We attempted timing the market with a calendar month in July when we talked about October lows. And it was only in our last email that we mentioned that the cycle low was still unwinding and October lows could be marginally breached. The reality is that Dow’s 10th October low still stands firm. And the marginal breach we talked about did not happen on Dow but on S&P.

October lows have extreme sentiments linked to them making them great multi-month, multi-year and in some cases multi-decade bottoms. We are nearing October 2008. If this looks like just another calendar date, think again.