THE FRACTAL SIGNATURE
A Comprehensive Step by Step Analysis Method
FEATURING KIRK’S CASCADING FILTER PROGRAM
Hi there, my name is Stephen Kirk and I am the founder and owner of Analyticoncepts.
Thank you for your visit today I hope that you will find this presentation of interest and
that the ideas I am going to speak of will help you discover and profit through investment
within the junior and small cap stock categories.
Take control of your investments!
Losing money in the junior market is very easily done, making money far less common.
Using proper technical and fundamental investigation, sticking to your rules of when
to enter and exit the market, not being too greedy or too fearful, and remembering that
patience and consistency in the practice of these methods will lead to success.
I’ve been buying and selling junior mining, resource and tech stocks
on various North American exchanges for over twenty-three years
using Metastock software.
Wall Street ≠ Small Street
When I first began using technical analysis to evaluate junior stocks I discovered
there is a big difference between junior and senior stocks. At first I thought it
was simply increased volatility and thin volume but something else was at work
... Fractal
Evolution!
This “pseudo evolution” is directly linked to the simple
but powerful concept of Diversified
Liquidity.
Successful junior stocks all have something in common, large numbers of active
investors and traders buying and selling significant quantities of stock. The number of
investors and the number of shares traded are not set quantities but combined these
values determine the degree and aspect of the stock’s fractal qualities.
What is Fractalism?
Fractalism is frequently found in nature
and is represented by a specific visual
Pattern which when viewed on a larger
or small scale, will still appear very similar,
retaining the essence of the original
pattern.
Fractalism within Equities.
The same holds true for stocks where repeating patterns continue to be discernible
over varying periods of time. The chart on the left is a daily chart spanning a one year
Period; the stock on the right an intraday 30 min chart spanning only several months.
The “common” stock of Small Cap companies “EVOLVE”.
The white line extending from lower right to upper left is the Main Evolutionary Sequence,
a path followed by junior and small cap stocks as the underlying company expands its
Business operations and increases its market share.
Fractalism exists in degree and aspect and
both determine the “evolutionary stage”
of the security.
An exciting fact is that all junior and small cap stocks must follow this evolutionary
track in order to become market leaders on the exchange.
The most basic stage is
ELEMENTAL FRACTALISM.
Stocks existing within elemental stages of fractalism have low long term growth prospects
and a very high failure rate, the majority of such stocks never progress further. Worse yet,
even when a stock in this stage experiences rapid and significant increases in price,
the action is short lived and the price often retreats even faster than when it rose.
Stocks in an Elemental Stage
Have very limited intraday price action
 Poor liquidity
 Prices tend to “revert to mean”.
 Limited positive growth prospects
 Strong downside potential; “fractal risk”.
 Over 95% of Junior stocks exist in this most
basic fractal stage!
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Also include treasuries, bonds, money market
and many income funds but this fractalism
arises from the intended design of the security.
The transitionary stage is
Progressive Fractalism
This is a period where the company has moved into advancing business development
stages. It is often at this time that the stock begins being covered by analysts receiving
attention in the newsletters and media. Stocks in this stage may still devolve or fall back
into an elemental state but more often the momentum carries them forward over time
Stocks in a Progressive Stage
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Have firm interday trend cycles but limited
intraday cycles
Have increasingly strong growth prospects
Limited downside potential; “fractal risk”
Less than 5 % of junior stocks exist in this state
Also include many preferred & debenture issues
and some income funds, again this fractalism is a
result of the design and intent or purpose of the
security or instrument. In fact, only common
stocks may evolve or increase their degree and
aspect of fractalism.
Complex trading characteristics exist in the Advanced Stage
These stocks experience multiple intraday cycles. Very often critical turning points occur
and are contained within the session and resist prediction by many end of day trading
systems. Stocks having entered these fractal levels will also experience fractal entropy,
A term meaning that now having so many active investors and so many shares trading,
that the degree of fractalism can no longer devolve even if the price drops to pennies.
Stocks in Advanced Stages of Fractalism:
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Have prices that constantly cycle in both interday
and intraday trading
The underlying companies actively compete in
the market and sector
May be market leaders on the exchange
Have very strong growth potential prospects in
both price and investment breadth
Have significant volume,
Prices vary greatly in range and mobility.
Include all the “blue chip” companies.
Knowing the Fractal Stage of a common stock is
an essential tool when it comes to investing in
Junior, Small Cap and Penny stocks...
You can wait years for such stocks to reach
a point where real long term
growth is possible!
... or you can enter the market at a
more opportune time. The choice is
yours.
By the way, price and trend play no part in the determination of fractalism
Recognize this company?
This chart spans the years of 1996 and 1997.
Here it is today... an investment of $500 then would
have purchased 100 shares which today would be valued
near $50,000.
But remember, just because a stock is fractally
advanced does not mean that it is immune to the
normal bullish and bearish cycles.
ANALYTICONCEPTS has developed a family of
effective fractal based indicators that mesh
seamlessly with your MetaStock software.
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The Fractal Signature – identifies the fractal stage
and degree of any stock and together with the
Metastock explorer function may be used to
identify other companies having the same fractal
characteristics.
The Fractal Seniority – compares the fractalism
present in any selected stock to that existing within
the primary benchmark indices; the S&P500.
The Active Market Capitalization – a fractally
adjusted comparison between the day to day
traded capital of a stock and that of a “middle of
the road” member of the S&P500 index.
The Fractal Signature expert provides a detailed report with respect to
evolutionary stage, fractal degree and its effects on trading, and
comparisons of the stock to the benchmark indices; S&P 500. You are also
provided with the “fractal code”, a custom formula that you can use with the
Metastock Explorer to locate other stocks in the exact evolutionary state.
Kirk’s Cascading Filter
A progressive system considering:
 The recentivity and fractal aspects of a stock.
 The degree of stable rather than extremes of volatility.
 The rate of Accumulation or Distribution.
 A proprietary long-term internal trend indicator.
 An adjustable Evaluation filter.
 Without considering volatility, accum/distrib, and long
term trend into account; the filter still eliminates over
95% of junior stocks actively trading (under $5) on
North American exchanges!
 Running this filter system each week will keep you
abreast of low priced, up and coming stocks that are
potential candidates for your portfolio!
This is the primary tool that allows anyone to identify only those stocks that meet the
minimum trading standards required for consideration for investment. The filter does
not consider price, so if you omit the “trending” components of the filter program you will
capture all of the “high end” stocks regardless of price. I also include an optional filter
formulated to identify possible “value” stocks that are in the process of making a turn
KIRK’S CASCADING FILTERS
are designed for MetaStock Explorations
The vast majority of the junior stocks identified as potential investment candidates by
this method will be listed by the analysts following these companies as being strong
buys or buys. After using the filter program for a short time you will be convinced in
the accuracy and consistency of the results when determining high quality potential
investments within the junior and small capital markets.
ANALYTICONCEPTS has developed additional analysis tools to help you
assess and evaluate potential investments, no matter the type or market in
which they trade and in any and all price ranges.
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The Dynamic Signature – determines the dynamic trading characteristics of any
stock and formulates a custom indicator that may be used together with the
MetaStock Explorer function to identify other stocks having or having had
similar signatures in the past.
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This allows you to discover additional stocks that are highly suited for the back
testing of a specific trading system – comparing apples to apples etc.
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This may also be used to provide insight into the trading aspects of a stock you
are currently assessing. Even though price and trend direction do not figure
into the trading dynamic formula, very often the price speed and mobility of the
current signature will be reflected in other stocks having similar signatures.
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This is a very specific assessment, usually only 2 – 3 % of the stocks on an
exchange will share the same dynamic signature at a given time.
Three highly effective trend cycle position indicator systems
are included in this package.
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Each is based upon different aspects of trend evaluation;
Fibonacci moving averages, Parabolic SAR values, and
Relative Strength Index values.
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Not only are these three expert add-ons offered in a
package deal, but the concepts and formulas are
completely described within Stephen Kirk’s book;
Fractal Evolution = Profit Revolution!
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Knowing how and why an indicator functions, plays a big
part in evaluating the indicator(s) reliability when applied
to a particular stock.
These three trend cycle locator systems, used together
with the optimized accumulation/distribution and the
internal long-term trend system help with market entry
and exit and ensure that you stay on the right side of
the trade or investment.
One of the most important and yet overlooked aspects of investing
deals with risk control within your portfolio. Controlling risk in your
portfolio is paramount to your ability to remain emotionally detached
from extremes of greed or fear in rapidly changing market conditions.
ANALYTICONCEPTS provides a number of unique volatility and
performance based indicators comparing a particular stock to that of a
benchmark indices. These indicators, included in the expert report,
compare performance, correlation to trend movement ,as well as
volatility both in the long and short term.
The reports also assist in your determination of what value percentage
of a particular stock you should hold in your portfolio based upon
various indicators comparing the stock to that of a benchmark indices.
It must be remembered that these are technical tools that may be used
as an approximate gauge of market volatility and performance but do
not take the place of in-depth fundamental analysis or the advise of a
qualified professional financial advisor.
ANALYTICONCEPTS
THANK YOU FOR YOUR INTEREST!