## Pythagoras & All Ords

**From July 1982 to September 1987 the market moved from 443.1 to 2312.5 on the physical and to 2343 on the Sep Spi.**

**This represents an expansion of 523% which is just over twice the boom of 2003 to 2007 which moved the market by 256%.**

**Like all massive booms it was followed by a crash which saw the market lose exactly half it value with the low on cash at 1149.3 and 1054 the Dec Spi on 11/11/1987 in the mid morning as I recall.**

__For the move from 1982 to 1987__

**Delta T Days = 1899****Delta P SPI = 1900 Spi Points****Delta P XAO = 1869 Points**

**What we have here is a perfect Pythagorean triangle, where the rise over run or dy/dx is exactly equal to one.**

**This is no small coincidence. **

**The rate of change for the entire boom was 1 point per calendar day.**

**This is a very important clue as to what the true internal dynamics of the All Ords are, and as such how all financial markets work.**

**What this is showing you is the first underlying derivative of the market was constant for 1899 days. If you use a 360 day year dt = 1869 add this 443 you get 2312 .**

** 443 + 1869 = 2312 Exact high of the XAO Cash 18/9/87**

**Therefore the change in price for the entire boom of the 1980’s was equal to the change in time.**

**This asks the question, are we looking at a proof that as the old saying goes time is money.**

** Change in time = Change in price.**

__The Crash of 1987 to the Retracement High of 1855__

**The market made the final high over the week end of 18/9/87 to 21/9/87 **

**The next thing the market did after opening on the Monday was lose 50% of it value in 51 days.**

**To make a final low of 1149.3 and closed at 1152. on 11/11/1987**

**The greatest rate of change the ASX had ever undergone was on the 20 ^{th} of October 1987 when it lost 20% of its value by mid morning with most of damage being done by 10:30 when the market was fully open.**

**After this the market made a double bottom with a second low on 7/2/88 @ 1169**

**It then rallied in a standard set of moves that bought back 61.8% of the loss in the crash.**

**All very standard text book stuff. **

**What however is not seen by the naked eye is the fact that the time it took to recover was solvable from information available to you long before the fact. **

__Solution and proof for relationship between crash of 87 the next high in 1989 __

**DtCd = Delta T in calendar days****DpSpi = Change in Price of the front Month of the SPI Contract**

__Observations and Co Ordinates for move from 1982 to 1987__

**DtCd = 21/09/87 – 11/11/87 = 51 Days****DpSpi = 2343 – 1054 = 1289 Points****DtCd = 51****DpSpi = 1289**

__Formula 1 :__** Dt2 = ( 2 * Dt1 + DpSpi ) / 2**

**Dt2 = ( 2 * 51 + 1289 ) / 2****Dt2 = 695.5**

__Formula 2:__** Dp2Spi = 2 * Dt1 + Dt2**

**Dp2Spi = 2 * 51 + 695.5****Dp2Spi = 797**

__Results__

**11/11/87 + 695.5 = 6/10/89****1054 + 797 = 1851**

__Actual Results__

**The Exact high occurred on 6/10/89 @ 1855.**

__To Summarize__

**If you are taking half the sum or the difference of two numbers you are calculating a beat frequency which again falls into the area of wave propagation and spectrum analysis.****To solve for the spectrum of the market is another way of saying to find the frequency or the length of the cycle.****This cannot be done using the Roman calendar and the base ten numbers.****The Calculus implications of this cannot be understated.**