Confirming the Flash Crash Omen
by Gordon T Long
June 2, 2010
Flash Crashes and Dashes will become more apparent. By their very nature they are de-stabilizing. When certain natural frequency boundary conditions are broken the markets will eventual seize up despite all circuit breakers and attempts by authorities to stabilize markets. These boundary conditions are not presently understood nor seen to exist. For practitioners of Chaos Theory they are a basic tenet to understanding any phase shift.
We are nearing a ‘phase shift’ in what I will refer to as the energy level of the markets. Elliott Wave practitioners would refer to it as a ‘higher degree pivot’. W D Gann practitioners would call it a Gann Cardinal. Economists call it a “Tipping Point”. I call it a ‘Critical Point’ or ‘Chaotic Transient’.
A trader would just call it a market melt-down or melt-up! Few alive have ever witnessed either.