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Mathematics And Markets - A Helicopter View Of Major Stock Market Indices - Mar. 4, 2018

Mar. 06, 2018 12:02 PM ET2 Comments
Laomedeia Ltd profile picture
Laomedeia Ltd


  • Chaos theory mathematics allows for objective comparison between stock market indices, thus providing a helicopter view of the risks and potential associated to major financial markets.
  • All indices point to potential medium and long term weakness.
  • Russell2000 index shows elevated and significant risk.
  • S&P 500 index and Nasdaq100 show unfavorable risk/reward.
  • Dow30 index shows short term favorable risk/reward.


Applying Mathematics to Analyse Financial Markets – Part 1, Innovation

Applying Dynamic Chaos Theory to Analyse Financial Markets – Part 2, Good Investment Practice

A Helicopter View of major stock market indices – Feb 18th, 2018

Chaos theory mathematics - Abstract

When Chaos Theory mathematics starts to work on multiple distinct layers, it yields two time dependent price values for each distinct layer. The time dependency of these price values is a direct consequence of the irregular shape of Julia-sets. One of these price values represents the price-target for an underlying asset. This price-target equals the value an underlying asset will assume in future. The other price value is the price-edge and represents the lowest or highest value the underlying asset may assume without jeopardizing the price-target. In other words, the value of the underlying asset should stay within the boundaries of both time dependent price values generated by the method. This applies to all distinct layers. (See Part 1, Innovation).

A Helicopter View of major stock market indices

This publication elaborates on the idea to objectively compare major stock market indices with the help of chaos theory mathematics, thus providing a helicopter view of financial markets. First we will review the individual status of the S&P 500 index, the Dow 30, Nasdaq 100 and Russell 2000 indices. Then we will compare the actual status of these indices with the help of our decision criteria and try to draw a few objective helicopter level conclusions.

Readers should be aware of two important characteristics of dynamic chaos theory mathematics, which has been described in previous publications (see references):

  1. All calculations use time dependent price-target and time dependent price-edge information
  2. All research is relative to the actual price of an asset at the moment of publication

Although the information remains

This article was written by

Laomedeia Ltd profile picture
I have been actively investing since 1996, initially based on TA and fundamental research. Over the years, I always wondered what invisible hand (if any) guided the markets. The last 4 years I have researched markets based on physics. It turns out that by applying chaos theory mathematics you can use key characteristics of complex polynomials to define price-targets and price-edges on multiple distinct fractional levels. This research visualizes the interplay between polynomials and specifies Risk/Reward ratios per distinct level. Daily analysis takes place on up to 9 levels, enabling the generation of as many price-targets, price-edges and R/R ratios. Laomedeia Limited holds the Intelectual Property rights and offers market research for indices, commodities, currency pairs, bonds and individual stock on www.laomedeia-research.com (subscription).

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

Laomedeia Ltd profile picture
thank you xpan. It may actually be a bit of all, Art, Math, Physics, Psychology...
But, when you see this all playing out it certainly is mind boggling and continues to amaze me every day.
In my early years of trading/investing, I was told that it's not math, it's art. After all these years, now I finally know what went wrong: it's not art either, it's actually physics!
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