Wednesday, July 09, 2008

Unraveling the Mysteries of the Idiot Wave

While rummaging through my attic, I discovered a collection of old manuscripts from Robert Nudnik Idiot, a physiologist and researcher into natural phenomena and the movements of stock markets. It was during Dr. Idiot's research that he made a surprising discovery: the recurrence of the number 10 in all human bodies he studied. With amazing regularity, each human body had ten fingers, divided into two groups of five. Not content to settle on this discovery, Dr. Idiot proceeded to study the feet of his subjects. He was amazed to find the same pattern of 10 repeated in two groups of five toes.

Gradually, the grouping of 10 into sets of five--the Idiot Wave--became the topic of the good Doctor's study of natural phenomena. In religion, Dr. Idiot found that the tablets of Moses contained 10 commandments, with five on each side. He also found that David Letterman invariably constructed his lists in groups of ten, with a commercial break in the middle. The Idiot Wave, it appears, is an organizing principle for all of nature.

In an earth-shattering discovery, Dr. Idiot found that many important market turning points have occurred 10 years apart, such as the market lows of 1977 and 1987, with a "dividing low" at 1982, five years between. This relationship of 10 also appears to be fractal, occurring across time frames. Last week, for instance, we saw an important market turning point at 10 AM in New York and another one at 10 AM in Los Angeles and 5 PM in London.

With considerable study of Dr. Idiot's manuscripts, it is now possible to unravel the secrets of the stock market and apply Idiot Wave principles to all forms of trading and investment. The home study course I'm developing will teach you everything you need to know to trade Idiot style. It will be available for $10,000, which you'll be able to pay in two evenly-spaced installments of $5000. It's amazing how often that pattern shows up...
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24 comments:

Steve said...

Sweet! Do you take Paypal?

;-)

jeff said...

and more importantly, do you elaborate on the "flying sushi" pattern?"

Jon said...

Nothing like a little amusement during this consolidative chop.

Love it!

David said...

All tools are based on a set of observations. If Three-Card-Monty and Idiot Waves use the same observation to make their business model economically viable, that does not mean the value of the observations has found it's "highest & best use". The observation set may still offer sharp insight into something (not security market related) that has yet to be organized.

Matt said...

I'm guessing the markets are a little quiet today.. hehe

Michelle B said...

OK, This is your best post. Ever. Which is saying a lot (My husband has given to saying when I breathlessly run into whatever room he may be in, exclaiming your latest post: "oh, so Brett wrote an excellent post? Tell me when he writes a poor one, now that would be news!").

Really deliciously funny post. Haaaaaa!

Firebird said...

Dr. Steenbarger,

Don't forget the work of Dr. Scam et al on the recurrence of greater and lesser waves every five subwaves (as is clearly demonstrated by your thumbs and, on a more advanced level, the month of February). Keep in mind that without integrating this essential principle in some propri€tary indicator, the Idiot wave is sometimes misinterpreted by lesser traders... ;D

Always right on the spot, please keep it up!

Best trading,

Jorge

procol said...

Yes, but what we really need to know is whether his middle name ,Nudnik ,comes from his maternal or paternal side.

It can have serious implications depending.

abel said...

I like it, those rare moments when you stand up on your hind legs and unleash, with no-holds barred.

Always brings a smile to my face.

As the saying goes, 'when you're good, you're good, but when you're bad, you're better!'

Dr Bruce Hong said...

Amusing. Tres Amusing

Paul said...

Now I understand. All the great free posts on this blog, your books, working with traders... all that was just a setup to sell your Idiot Wave package! The ultimate culmination of your master plan.

Wait, this is not April first...

I guess you couldn't hold this in until next April.

Thank you. :)

Arthur said...

you sold me, can you take an idiot rubber check?

konall said...

I love it when you take the gloves off and decimate(as in every tenth man)and the fact that you do it so rarely because you are a scholar and a gentlemen, makes it all the more sweeter!

Your Trading Coach said...

Actually, I met a guy once who had only 9 fingers as a result of an industrial accident. The important point here is that he didn't lose 3.82 fingers or 6.18 fingers, but only one, which is one tenth of the whole number of fingers, thereby proving the fractal nature of the Idiot Wave, and it's vast superiority over fibonacci analysis.

Great blog entry.
Cheers.

konall said...

I love it when you take the gloves off and decimate(as in every tenth man)and the fact that you do it so rarely because you are a scholar and a gentlemen, makes it all the more sweeter!

Art said...

Dr Brett, despite your satire, would you agree that a beginner trader should at least purchase an 'idiot wave' book, just to go through to process of critical thought and discounting bad information?

Dawid said...

Only 10 spaces available? Do you accept paypal?

Johan Lindén said...

I just got one thing to say, LOL!!!

:)

JMJAtlanta said...

Kinda reminds me of this one:

"The rare and dangerous Black Swan formation"

http://www.elitetrader.com/vB/printthread.php?threadid=128320

CharlesTrader said...

It is psychologically interesting as to why this post got the most comments.

Charles

markus said...

Charlestrader,

I guess a lot of people want to manifest they got it ;-)

Firebird said...

Charlestrader,

Yes, I was starting to think the same after I posted.

Research on the markets: 0-3 comments.

A bit of criticism (and I love it!): 22 and counting.

Time to hit the books and do some serious research (and a healthy dose of soul-searching, I guess) :( .

Best trading,

Jorge

Brett Steenbarger, Ph.D. said...

Thanks for the comments on the post. It was fun to write. Ironically, right after writing it, I told a friend that it was my best post ever. Then Michelle came up with her comment. Great minds (or maybe warped ones!) think alike!!

Brett

Alisa said...

lol :)