Thanks for this Elite. You have gone part of the way to proving...

Thanks for this Elite. You have gone part of the way to proving my point that WA1 has been as close to a perfect fibonacci spiral as you would hope to see in a stock chart.

For anyone unfamiliar with the Fibonacci sequence and the golden ratio it is well worth reading up on and getting your head around. It is named after an Italian medieval mathematician but Pythagoras was a student of the golden ratio in his school of mystery way back in the day. He noted that the golden ratio appears in many forms all throughout nature and no one knows why. The stock market seems to be no exception and any charting program worth its salt includes the capacity to put a set of Fibonacci lines over a chart.

A first order Fib ratio is 0.618 and a second order ratio is 0.382. This is not the forum to go into a long discussion about how those ratios are derived but as Elite_trader has correctly pointed out each retrace has been close enough to 38.2% of the rise from discovery to the next high. What Elite has not told you in his post is that after each retrace the next high is as close to 1.618 x the last high. Do the math for yourself and see.

So as I mentioned the other day the dollar value drop gets larger as the highs get higher but the PERCENTAGE drop (ie 38.2%) remains the same. So as depressing as it sounds if the pattern continues then this will pull up in the low to mid $14 dollar range. There is good news though as the spiral works both ways and if the pattern continues the next rise would see us at over $37. So what could drive it that high I hear you ask. Taking off my charting hat and replacing it with my fundamental cap I would say that a kick ass MRE could be just the catalyst.

Fun Fibonacci Facts:

Did you know the ratio between a year on earth and a year on Venus is the golden ratio.
Did you know the spiral on a snail shell is a Fibonacci spiral

I could go on but I won't.