Mathematical Digest

Short Summaries of Articles about Mathematics
in the Popular Press

"I know what you'll do next summer," by John Casti. New Scientist, 31 August 2002,pages 29-32.

This article describes the theory of "Elliott waves," which were first proposedby Ralph N. Elliott, an accountant who worked during the Great Depression ofthe 1930s. Elliott argued that the stock market follows a clear pattern of upand down cycles. The pattern is based on the Fibonacci numbers, an infinitesequence of numbers in which each successive number is the sum of the previoustwo: 1, 1, 2, 3, 5, 8, 13, 21,... The Fibonacci numbers are ubiquitous innature, describing for example the spiral patterns on seashells. Elliott waveswere used by financial guru Robert Prechter to predict the "super bull market"of the 1990s; he made the prediction in 1982, when the U.S. economy was inrecession. The theory of Elliott waves is based on the notion that humanbehavior follows clear rhythmical patterns and that human behavior thatdictates things like stock values. This leads to the conclusion that "socialmood actually shapes events," rather than the other way round.

--- Allyn Jackson

American Mathematical Society