I must confess I wasn't convinced by Elliott Wave Theory after reading the Wiki article, and found myself agreeing more with its critics than with the proposition. Still, Wiki does a good job of presenting both sides. The principal (or should I say principle) objection, however, that it must be mistaken because it contradicts free market theory, can be dismissed out of hand.

Free marketeers, who earn their living by circumventing and frustrating Adam Smith and otherwise gaming the system, feel a profound need to declare that what they do routinely is impossible. Their whole scam depends on their victims believing any mechanism (other than regulation and taxation) which might subvert a market must not be spoken of, much less considered seriously. Market fundamentalists do not want anything to attract attention to what they really do, and seem to think that no one else notices that if markets were actually free, business schools would not offer courses and degrees in marketing. One criticism they do make, however, is certainly valid: that the very detection of the existence of these waves would allow investors to interfere with the delicate feedback loops that make them possible. Reminiscent of Uncertainty Principle, this anticipates Soros' concept of Reflexivity. (Incidentally, what did you think of those Financial Times lectures? I hope they help you moderate your opinions of the man.).

This is not to say these patterns do not exist, all natural processes are saturated with them, they emerge spontaneously from the few simple physical laws which underlie all phenomena. Astronomy is full of them. The exquisitely detailed structure of Saturn's rings, for example, can be completely explained as an inevitable result of a handful of simple mathematical relations, Newton's Laws of Motion and Gravity. But no one anticipated such elaborate behavior was somehow magically coded into those deceptively simple relationships so easily expressed in high school algebra. A few simple rules applied to a universe of finite possibilities always seen to result in an explosion of unexpected complexity. Like an Elizabethan sonnet, within the strict structure imposed by rhyme and meter, an infinity of marvelous variations is still possible, but even they seem to fall into vaguely repetitive patterns, regardless of how individually truthful and beautiful each may be.

For obvious reasons, evolution has molded the human brain to be very good at picking up on patterns; so good, in fact, that sometimes we see them where they do not exist. Try this sometime, next time a dance program is broadcast on TV (ballet, polka, square dance, whatever), turn off the sound and randomly tune your radio to a music station (any music will do, rock, country, gospel). Within a few minutes the dancers will appear to be dancing to the music. (Smoking a joint helps, if you don't see it right away). The mind imposes order on nature; this is not to say order is not there, just that we tend to see it even when it isn't. This is the psychological source of all science--and superstition, too. And it certainly is the origin of most philosophy, behavioral and social studiues, even economics and political theory (yeah, Marxism, too, dear cousin Bobby). During the twentieth century, this error has even infiltrated the arts, our usual first line of defense against this nonsense. Just because something seems reasonable, or can be articulated eloquently, don't mean it's true, or even logically consistent.

There is a whole new science based on these themes developing today: emergent phenomena, encompassing chaos theory, fractals, cellular automata, as we have discussed before. It seems to be associated with theories of consciounsess, thermodynamics, and concepts from computer science, particularly artificial intelligence. It is currently in the stage of development medicine was when Harvey discovered the circulation of blood.

You have often heard me say that "There is pattern, but no order", and, "There is a reason for everything, but a purpose to nothing", or "All nature can be simply explained as matter and energy interacting in space and time". But this tendency for complexity to emerge from the simplest framework of underlying physical law still baffles me. There is definitely something important going on out there, just beyond my grasp, on the borders of my understanding.