MARTIN AMSTRONG-CIRCULAR REASONING: A MARKET FOR PI IN THE SKY

 Below is an interesitn article for  Martin Amstrong  published in Barrons on 2011

The man who called the '87 crash is now calling for a long-term market rise.

It looks like the stars are aligning for market theorist Martin Armstrong and his devout followers. Just as Armstrong is finishing up a long prison sentence for contempt of court—stemming from charges in which he was accused of running a kind of Ponzi scheme—his method of sizing up confidence in the economy is pointing to an upturn in the stock market.

Armstrong is the developer of the Armstrong Economic Confidence Model, best known for calling the crash of 1987 to the very day. The model pegged June 13-June 14, 2011, as the start of a long-term upward trend in the market; the market obliged by notching its first weekly rise since April 29. 

Buy Signal: An esoteric theory based on cycles that relate to the ratio pi recently signaled the start of a long-term market uptrend.

 

The model holds that every 8.6 years there are shifts in market sentiment, with public confidence waxing or waning in response to world events. Also key are quarter-cycles of 2.15 years. The low of the bear-market cycle on March 6, 2009, to the peak of April 29, 2011, spanned 785 days, or 2.15 times 365. The June 13-June 14 period marks 8.6 years since the last major bottom of 2002, and is 4.3 years (two times 2.15) from the 2007 peak of easy money and the tightest credit spreads ever.

The model is known as the "pi" cycle, because there are 3,141 days in an 8.6-year cycle, reflecting the value of pi (3.14159…) times 1,000. Pi, the ratio of a circle's circumference to its diameter, is a revered number among mathematicians and, in Armstrong's view, may help explain the model's predictive power. 

Jailed since 2002, Armstrong is under house arrest until September. "Regardless of who he is and what he may or may not have done…he does a great job of calling a hidden cycle," says Markman Capital Insight's Jon Markman. 

 By ROBIN GOLDWYN BLUMENTHAL 

http://online.barrons.com/article/SB50001424053111904548404576397780966386382.html#text.print