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William T. Erman- Creator of Ermanometry- @ Aug 23,2016 Dow Top

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#1 Geomean

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Posted 24 August 2016 - 01:04 PM

I learned from Larry Pesavento this AM that Bill Erman passed away (he was in his 90's).  Larry knew Bill and thought highly of him and his work.  I was acquainted with Bill and talked with him a number of occasions about his work and life.  Bill still had family in Kansas City and his uncle's scrap and metal recycling business is about a mile away from me fronting the Kansas river.

Bill is the creator of Ermanometry, which applied geometry, specifically log spiral geometry to the markets in order to anticipate inflection dates.  I've used Erman's work for years and find it a wonderful confirming signal, and when it hits in alignment with other signals there is much more confidence in the trade.

Here are two Ermanometry charts below. Larry P posted the first this am on TFNN  from one of Bill's colleagues that was created using Bill's techniques which Id's 8/23/2016 as a major long term top in the Dow.  (I don't have a good copy as my snipping tool provided a grainy  version).

In addition to that chart which goes back almost 100 years, below is my chart of the Dow with recent shorter term Ermanometry inflection points noted with colored dots which were created using the geometry of Bill Erman that I coded into Trade Station for use on Daily Charts (Coles wrote the orginal software for hourly charts and it is available at http://traders.com/D...adersTips.html)(I posted the Daily Ermanometry code in the Trade Station support forum)

 

We've lost a true genius in analyzing the market

 

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#2 Geomean

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Posted 24 August 2016 - 01:16 PM

Larry Pesavento just provided a copy of the chart he posted on his show this am which greatly improves the quality.  It was from Kevin Murphy. It is based on "balance points", which averages the distance between major inflection points in the SPX and the Dow if they have different inflection dates.  The other chart, which was not sent, was pure Dow and had the 8/23 date

 

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Edited by Geomean, 24 August 2016 - 01:25 PM.

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#3 Geomean

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Posted 24 August 2016 - 01:29 PM

Here's the final chart

 

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#4 kssmibotm

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Posted 24 August 2016 - 02:47 PM

Nice analysis.  Thanks for sharing.  Back in the early 90's, I did a similar analysis with Fibonacci numbers and ratios which predicted a major top in 1995. We all know how that worked out. giveup.gif



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#5 CRUISENAL

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Posted 24 August 2016 - 05:12 PM

Very interesting. Thanks for posting



#6 NAV

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Posted 24 August 2016 - 09:13 PM

It's very easy to perfectly time the tops and bottoms on historical charts, by curve fitting the calculations. While, it's impossible to do it in real-time or ahead of time. The rate of success doing it in real-time (or ahead of time) is less than 10%. Been a keen observer of this for many years. 

 

When somebody talks about a turn date for the long term, my antennas go up. I still give the benefit of doubt to the technician. If the market drops 20% without violating the Aug 23 top, my hats off to Bill. Will be watching with interest.


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#7 Geomean

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Posted 25 August 2016 - 04:18 AM

Hi NAV

I agree there can be a great deal of data fitting that can occur when using ratios to describe past market action.

Log spiral geometry permits, once one selects/ID's the "A-B" & "B-C" legs from prior significant inflection points and measures their duration, the calculation and projection of potential future turn dates.

If one reviews the "dots" on my chart I posted (generated in advance with the log spiral math in my software ) all hit at or within 2 days of inflection points.

They were calculated and knowable in advance. But like any other form to market forecasting, log spiral math has limitations (mainly false signals) and is not 100%. That's why I view it as confirmatory but useful tool for trading.

I'm just saying that Bill Erman should be remembered for making a significant contribution to technical analysis by elucidating how to use geometry to project time in the markets. The results of his work are on display with the short term "dots" generated using his math on my chart and in Kevin Murphy's very long term charts.

Of even more significance now is that Ermanometry, as evidenced by both mine & Murphy's work, is confirming other forms of analysis, namely Hurst, Elliott, and DeMark, finding this timeframe is likely an inflection point.
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#8 NAV

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Posted 25 August 2016 - 04:37 AM

I'm just saying that Bill Erman should be remembered for making a significant contribution to technical analysis by elucidating how to use geometry to project time in the markets. The results of his work are on display with the short term "dots" generated using his math on my chart and in Kevin Murphy's very long term charts.

 

 

My respect to anybody who contributes in any field. 

 

Of even more significance now is that Ermanometry, as evidenced by both mine & Murphy's work, is confirming other forms of analysis, namely Hurst, Elliott, and DeMark, finding this timeframe is likely an inflection point. 

 

 

To me the most telling is the stubborn sentiment on this board. From what i have seen in the past, it generally does not end well.


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#9 relax

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Posted 25 August 2016 - 01:25 PM

still big (and bigger than ever) difference between sentiment and actual willingness to trade that sentiment, let alone get the positioning, exit, leverage and practicalities of life (wife screaming to get out and spend time with the family etc) right

 

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#10 relax

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Posted 25 August 2016 - 01:26 PM

this board has also become somewhat illiquid, like trying to read market sentiment on cisco or IBM ;-)