A few days ago, I shared a chart of the golden spiral or vortex of the XJO and showed how price movements of the XJO has a propensity to move within the spiral and spokes of the vortex. As you know, the golden spiral is nothing but just a simple use of fibonacci, something that most of us are using anyway to find price levels etc in our trading - it's nothing new at all.
Was fibonacci and cycles useful in trying to find the Change in Trend in the XJO recently?
Here's a chart of the golden spiral/vortex with the cycles to try to answer this question.
1. From the projected dynamic cycles, we can forecast TIME - or date in this particular case. Through the forecast cycle top, we can draw a vertical line upwards as shown on the chart.
2. A golden spiral/vortex is drawn with a center at point C, with the spiral through point B and a spoke through point A. From the red spiral, we draw a tangent horizontally to hit vertical line drawn from the cycle top. The meeting place of these two lines is the location where time and price meets, and the location for a change in trend.
"When time and price is squared, change is imminent"..WD Gann
3. From the chart above, for the XJO, it is easy to see that we can get a reasonably accurate projection of time and price...good enough for the typical trader. In this particular case, we actually got the exact bar high that was the peak itself by using this method.
4. Also note, those who use number counting of bars eg Kenison's number counting, Tom Demark Sequential and setup etc, note that the peak was actually a bar "9" which normally denotes the peak.
4, I've also marked the next forecast cycle bottom ( early May) if the short term cycle remains stable...and when it comes nearer to that date, and for those who are keen on fibonacci, we can draw another golden spiral to try to divine the next Change in trend, and see how our forecast goes:)- That is expected to be the time and price (support) for this current pullback.
Hope you have found this simple fibonacci charting to be interesting, and hopefully to be of some use in your trading.
Trade well, trade safe.
dascore
PS. In contrast, there was a 3 trading day overshoot by using gann vibration number as I've shown in my previous post... PPS. Please note the disclaimer below my signature line. Thanks.
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