These emotional swings account for about 40 percent of market variation, so are very important to traders. The similarity of the two curves is very good, at least until February 1, 2001. My Market Chaos Theory holds that as the energy disturbances impact our ionosphere, that they set up two waves in the earth's elecric field, one traveling each way around the earth. This creates a normal, and an inverted wave, which is the normal wave upside down. The theory holds that the market follows the normal wave, the inverted wave, or a combination of the two.
Chaotic systems are systems that can have more than one solution.
Markets are provably chaotic. One feature of such systems is that they spend a large amount of time going nowhere. These are times when the two competing forces are balanced. As a chaotic system approaches a balance point, it only takes a small force to tip the balance. Theoretically, in a market, a single trade could do it.