The All Ords 1917 – 2018
Data: ASX Research Reconstruction of the All Ords ISBN O 9591857 8 X
The chart above shows the All Ords for the last hundred years rescaled from base ten to the square root of Pi therefore every even integer represents the market growing by 314.59 percent where every major boom from 1967 to 2007 was Pi times the price of the high of last one.
The Geometry of Volatility: Is the All Ordinaries Governed by Pi?
In the study of financial markets, the search for patterns in the chaos a compelling mathematical perspective suggests that the All Ordinaries Index (Australia’s oldest equity benchmark) moves in long-term cycles governed by the fundamental constant Pi.
The Recursive Nature of Market Highs
If we view market movements as part of a continuous circular or wave-like cycle, it follows that Pi is the basis of all cyclical behavior—should manifest in the data. Historical evidence from the post-Depression era reveals a startling correlation: every major market high relates to the previous one through pi or its roots.
Starting with the first major high after the Great Depression, we can trace a nearly perfect geometric progression:
- The 1960 High: Taking the post-Depression peak of 74.5 and multiplying by Pi gives 234.04. The actual market high in 1960 was 239.
- The 1981 High: Repeating the series 234.04 times Pi yields 735.28. This closely aligns with the “Fraser Resources Boom” peak of 746 in January 1981 and perfectly with the second high of a closing triangle top at 735 exact.
- The 1987 High: The next step in the series 74.5 times Pi^3 is 2,309.96. The 1987 cash market high was almost exactly that, peaking at 2,312.5. It Opened at 2305 rose to 2312 and closed at 2305
After decades of market action, the same constant reappears with over 99% accuracy in multiple instances. While the 2007 peak of 6,873 fell slightly short of the theoretical 7,256 target, this deviation suggests the market’s “circle” may actually be elliptical, governed by more complex wave functions and that the composition of underlying index had been changed considerably in the intervening years.
To obtain even greater resolution, we can apply the roots of Pi. Using the square root of Pi we identify the harmonic “speed bumps” that occur between major decades-long peaks:
Table 2: The All Ords 1937 high to 1987 high scaled to the square root of Pi.
- 74.5 * Pi^1/2 = 132 .04 – Post-War Recovery
- 132 * Pi^1/2 = 234.04 – 1960 High
- 234 * Pi^1/2 = 414.84 – 1970 Mining Boom
- 414 * Pi^1/2 = 735.28 – 1981 High
- 735 * Pi^1/2 = 1303.25 – Mid-80s Acceleration
- 1303 * Pi^1/2 = 2309.96 – 1987 High of the day was 2312
Euler’s Proof and the Complex Plane
This theory gains deeper scientific weight when integrated with Euler’s Identity. In calculus, market trends can be measured as the growth and decay of an exponential system per unit time as the direction of the wave function that is creating the trend.
By translating price and time action onto the complex plane, short term market volatility can be filtered out by the use of the mathematical equivalent of a band pass filer so that the market can be modeled and more accurately priced.
It is just a matter of drilling down long enough and far enough into the data to find the smallest “quantum” move a market can make to find its diffraction grid values and discover its natural price scale.
Conclusions
The only real conclusion you can come is that this asks more questions than it answers.
- It does suggest that markets are not merely collections of random trades.
- Instead, they appear to be a massive wave function that can be solved.
- By applying the correct price scale—one rooted in the constants of the natural world.
- One that is based in a entirely new frame work and way of thinking about money.
- The obvious question is if such an obvious mathematical relationship as the one above is invisible to us what else are we missing out on that is right in front of us.
- But shrouded from view by a hideously obsolete way of observing the data in the first place.
The two key problems with all market thinking and analysis is that it is all calibrated in terms of the Roman calendar and base ten price scales which are separated by 14 centuries of history, neither of which is anywhere near up to the task of scientifically measuring let alone understanding the complex internal dynamics of a modern financial system.
Next In this Series: Pythagoras and The All Ords