Lindfield, great idea. Hope this thread gets great support & lots of comments. great way to learn IMO>
Fibs, ahhh when I embraced TA about 12 months ago fibs were something that I was very cynical about. Love a bit of maths but what use was some number sequence discovered in 1202 to determining shre price and there movements? What use could a few "random" numbers that:
" appear in biological settings, such as branching in trees, arrangement of leaves on a stem, the fruitlets of a pineapple, the flowering of artichoke, an uncurling fern and the arrangement of a pine cone. " be? (quote from wikipedia)
My views changed when I listened to a podcast that talked about the spx (and world) share market rally through 09 and early 2010. It was in March sometime this year and the guy talked about the approaching price move toward the 61.8% retrace of the 07-08 decline. I nearly did not listen (very dangerous practice in this game IMO) when he started to say he did not care WHY it worked but knew that if he knew it then there was hundreds of MARKET MAKERS that were watching the same number.
Mmmmm I can watch that same number me thought!!!
Went home plotted the 61.8% line on my chart (1228) and watched the market race up to it and retreat at 1220, check below. Not bad.
Mmm got my interest. Checked Dow:
Lets check the retrace from the spx 09-10 rally . Stalled at 38.2% (1009) versus July low of 1010. Now we are talking.
So I am convinced that there is something in these damn Fibs.
Lets look at where Dow is right now against recent rally has it tried hard to get above 61.8% but maybe about to retrace?
One final lets check XJO: recent rally high 4599 and on chart below the 50% retrace is 4600. Are we reversing off this number? fair chance me thinks. Coincidence or something else at work? Who cares they work.
PS. Worth noting that 50% is actually NOT a fib but it has snuck into the charting stuff because it works.
GJ
