Trading Articles

The Law Behind the Markets By Lee J. Franklin

Twenty-two years ago I began an investigation into the nature and history of money. The purpose was to satisfy a natural interest that wanted to understand everything about the idea of money. It was a spontaneous, intensive, self directed search for the Truth that lasted fifteen years. The end of this quest naturally transformed itself into the beginning of another: seeking an understanding of the movements of the markets. At this time, it may be of interest to the reader to know that I began this second quest in the same fashion as the first: with focused intensity, self-direction and spontaneity.

Prior to starting this second quest, I had never picked up or read any book, newspaper or magazine that dealt in any way, with the markets. The reason for this was two-fold: 1) The interest did not exist, and 2) I feel it of crucial importance to begin all new investigations free of the prejudicial influence of the ideas of others. This method serves to maintain an attitude of intellectual honesty, natural wonderment and curiosity. In short, personal experience has taught me that being a “Trail Blazer” is far more exciting than tromping the beaten path. This same idea is wonderfully expressed by the late poet Robert Frost in his poem about the two paths in the woods. One path was wide, well worn and clear almost as far as you could see. The other was heavily overgrown, barely discernible. At the end of the poem, Mr. Frost reveals what his decision was at that time. He informs the reader that he took the path less traveled. And that, he said, made all the difference.


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Upon entering the library of the business school at the local university, my mind was naturally drawn to the steel drawers holding microfilms of the New York Times and the Wall Street Journal. Whizzing through a few rolls on the motorized viewer, my eye was caught by the financial sections which reported the daily, weekly, and yearly highs and lows for all the securities. I began to make a record of and study the movements of the prices of securities as far back as they were available, focusing eventually upon those comprising the Dow 30 stocks. Putting the records together to form a more complete picture, I noticed a pattern, a certain “periodicity” to each one’s movement. Dwelling at night upon a mathematical model to explain the cause of those movements, my mind produced many models to test against the market’s moves.

There were times when the calculations were very right, and equally, times when they were very wrong. Some spectacular calls made, like the 125 point “drop” in April of 1988. And calling the closing number of the Dow within 4 points on expiration day in October of that year. However, large profits made on the correct calls were slowly piddled away with trades made on bad calls. It all came to a wash. Does all this sound somewhat familiar?

THREE VALUABLE LESSONS

From these experiences, three very valuable lessons were learned.

  1. If one does not KNOW.., with knowledge derived from numerical facts, whether the market is at a “Top” or “Bottom”, one will lose…, period!
  2. Work hard to perfect that which works, and set aside that which does not.
  3. Never give up!

A few years ago, a friend returned from a visit to the South and handed me a thin, small book. Eighteen years of intense, sincere searching, seeking, knocking and asking, were about to be answered. The little book was a short biography about a gentleman named Walter Russell. It was titled, “THE MAN WHO TAPPED THE SECRETS OF THE UNIVERSE”. The book described in brief, Mr. Russell’s youthful experiences leading to the time when he became “Illuminated” by a very bright white “Light” that put him into a trance-like state of mind. Afterwards, he was to spend months and years putting into words, the ideas he received from this “Illumination”. As I finished reading it, my mind became flooded by only one thought: “This man has KNOWLEDGE and can teach me how to obtain it.!”

I wrote to the address on the inside cover of the book asking for additional information. An Order Form was returned to me listing all the available writings of Dr. Russell. One title stood out: “A NEW CONCEPT OF THE UNIVERSE”. Within a week, UPS delivered it into my hands. No quantity or quality of words can explain what happened next. As if by an unseen guiding hand, Dr. Russell’s book fell open to a diagram of his ‘Wave” and “Periodic Chart of the Elements”. I counted the component parts of Dr. Russell’s “Wave”..and nearly fainted from a rush of adrenaline ! NINE ! ! there were NINE parts to the “Wave”! Dr. Russell’s “Wave” of the Universe had the same component periodicity of NINE that I discovered in my securities records. The intellectual “rush” that swept over me that day might be likened to the feelings of Mel Fisher when he finally found the sunken treasure of the Spanish Galleons near Key West Florida ! The LAW REVEALED.

I subscribed to Dr. Russell’s “Home Study Course in Universal Law, Natural Science Living Philosophy”, available through Trader’s World Magazine in the catalog section of this issue.* Contained within those precious volumes of KNOWLEDGE is The Great Law of Vibration. Dr. Russell refers to this law as a Universal Principle of all motion: He states it as follows:

“…ALL MOTION STARTS FROM A POINT OF REST. SEEKS A POINT OF REST. AND RETURNS TO THE EQUILIBRIUM OF REST FROM WHICH IT SPRANG.”

My next and final step was to make the beginning point of Market Cycles, and securities within those Cycles, conform mathematically to this Law. The results have been astounding! In the last eighteen months, eleven major “Tops” and “Bottoms” were “Timed” within minutes of their occurrence! The Market achieves these major points “…of rest..” Between four to twelve times a year. They can be traded on a 100% probability basis, provided you have KNOWLEDGE of the following:

A. When to start and end each Cycle.
B. Which Securities belong in which Cycle.
C. How to maintain a “Balance” sheet on securities and assign starting values in conformance with the Natural Universal Law of Motion.

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About Editorial Team

The dedicated editorial team at Sacred Traders has a passion for educating traders of all levels. With decades of combined experience trading stocks, forex, commodities, futures, and options, they provide insightful analysis and actionable advice to help readers succeed in the financial markets. The editorial team includes experts in technical and fundamental analysis. They consistently monitor economic reports, earnings announcements, political developments, and other factors that can impact asset prices. By synthesizing this information into trading alerts, educational resources, and market commentary, the Sacred Traders team provides traders with the essential knowledge needed to thrive across asset classes.

One thought on “The Law Behind the Markets By Lee J. Franklin

  1. Tony says:

    Lee,

    Intriguing article. It’s been 20 years since I opened my Walter Russel materials. Likewise, I found it fascinating, to say the least. I once was in contact with a descendant of Firestone who generously sold me original copies of Russel’s Home Study Course, The Secret of Light, The Universal One, The Divine Iliad, and a book not listed in the public domain. I hope this shared interest encourages you to post again.

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