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Posts tagged ‘Fibonacci’

Current Position of the Market by Andre Gratian

By: Andre_Gratian

Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are down and, if   they make their lows when expected (after this bull market is over) there will   be another steep and prolonged decline into late 2014. It is probable, however,   that the steep correction of 2007-2009 will have curtailed the full downward   pressure potential of the 120-yr cycle.

SPX: Intermediate trend – SPX has made a top at 1474. A mid-correction   rally is underway.

Last week’s newsletter discussed the probability of a mid-correction rally   starting from the 1335-1341 level, the possibility that a short-term low had   already been reached at 1343, and that a reversal had already started. The   forecast turned out to be correct, but the mid-correction rally is even stronger   than anticipated. I had an initial phase projection of 1403, but on Friday SPX   closed at 1409. Although Friday’s momentum could spill over into Monday, SPX is   giving indications of having completed this phase of the rally and is ready to   start a retracement. I have already mentioned that the reason for this pull-back   would be the cycles that are due to bottom at the end of the month and that   which are likely to produce a retracement of about 50% of the move from 1343.   This is reinforced by the fact that this would be a retracement down to the   level of the 4th wave of the 5-wave move which ostensibly just ended. For SPX,   this would take prices back down to about 1377.

A reason for the rally to end at Friday’s high is that it represents a 50%   retracement of the entire decline from SPX 1474. DJIA has retraced slightly less   than 50%, while NDX has only retraced slightly more than .382 which still makes   it the weakest of the three indices.

Following the near-term correction into the end of the month, a resumption of   the rally is likely with marginal new highs anticipated, perhaps extending to   .618 of the decline from 1474. That would bring SPX to about 1424. Upon   completion of this move, the intermediate decline could then continue into the   original forecast time slot of early 2013.

I have given a forecast of what could happen over the next few weeks based on   cycles and Fibonacci projections that seem logical. Let’s see how accurate this   scenario will turn out to be.

In last week’s newsletter, I also mentioned that AAPL had most likely reached   a near-term low in a climactic fashion. That also proved to be correct. By   Friday’s close, the stock had tacked on another 42 points…………………………….

full article at source:http://www.marketoracle.co.uk/Article37719.html

The Hitch-Hiker’s Guide to Markets, Inflation and Deflation Over the Next 8 Years

I could not go without writing a serious  parody of the above original comedy series, so be prepared to enter this guide,  which will hopefully offer a fraction of information in “the standard  repository for all knowledge and wisdom”.

This planet has a problem – and has had  this problem repeated throughout history – a problem that made most people  living through it unhappy for pretty much all of the time…and this involved  periods of inflation and deflation.

The objective of this article is to provide  what I think is an accurate version of inflation/deflation and what to expect  over the course of the next 8 years, based upon the Contracting Fibonacci  Cycle. Time points will be identified, followed by charts illustrating Elliott  Wave Analysis indicating why we are on the cusp of a major breakout in the  broad stock market indices and commodities. This analysis runs counter to many  deflationist views, which ties into the proposed definition that will be  described. This guide will be subdivided into sections that are based upon  names present within the 6 novels of the Hitch-Hiker’s Guide series.

As Per the Above Title

There are some deflationists who think we  are in a period of deflation…one noted definition of inflation is “a net  expansion of money supply and credit, with credit marked to market” and the  opposite for deflation.

A problem with the above definitions is  that they provide very broad definitions and often, these outcomes do not occur  until a “Tipping Point” has been reached. Malcolm GladWell wrote a book titled  “The Tipping Point” which I would strongly recommend everyone read. In a  nutshell, different systems, problems etc. do not follow linear relationships but  rather, a “tipping point” unique to a given system under study occurs. This  unique “tipping point” changes the balance of things, causing an accelerated  shifted shift to the upside or downside of a trend, based upon the unit of  measure under study.

Applying this thought to deflation, many  things happening in the news such as job layoffs, bankruptcies etc can  overwhelm senses to provide an empirical conclusion that deflation is just  around the corner.

The definition of inflation or deflation I  propose is a scalar model that comprises the integral of all components  (summation of the slope all components chosen to include in broad economic  sectors and measures) based upon the derivative of their measurements (rate of  change, as an example car speed (km/h, m/s) or money velocity). The derivative  components of each part of the equation represent the rate of change for each  chosen item by graphical representation to form a slope ($/month positive or  negative) that has an assigned probability (R2). Each item added up  can provide the integral, or summation as to whether or not inflation or  deflation is evident as a whole across the economy. Examination of individual  components offers visualized trending to determine whether or not a given  sector or defined measure is entering deflation or inflation.

full article at source: http://www.marketoracle.co.uk/Article36061.html

Current Position of the Market

By: Andre_Gratian

SPX: Very Long-term trend – The very-long-term cycles are down and, if they make their lows when expected (after this bull market is over) there will be another steep and prolonged decline into late 2014. It is probable, however, that the steep correction of 2007-2009 will have curtailed the full downward pressure potential of the 120-yr cycle.

SPX: Intermediate trend – SPX is in a limited intermediate uptrend which is estimated to end in the first week of Au

Market Overview

Ever since the SPX started its uptrend from 1267, I projected that the rally would end at about 1404. That was a target derived from a Point & Figure count taken across the base and confirmed by a Fibonacci measurement. While this is a preferred count, it is not an absolute, and there is a valid count to 1425 and some even higher. Last Tuesday, the index rose to 1407 before backing off and spending the rest of the week moving sideways in what could turn out to be a pattern of distribution — which would put an end to the rally, resulting in a subsequent decline, or one of re-accumulation, with an eventual break-out to the upside followed by higher prices

Next week should determine what path the market wants to follow over the near-term. Taking into consideration the cyclic configuration, the odds favor an end to the rally sometime this month, with a preference for the first part of August. Friday’s price action was caused by a minor cycle bottoming in the first hour which initiated a bounce into the close. Although that looks like the start of a move to higher highs, some important indices did not participate, bringing into question whether this was simply a test of the highs. On the other hand, XIV made a new high while the market did not — action which is potentially bullish (but not infallible). This is why we need to wait for Monday to clarify the market’s intention.

Whether or not we are ready for an intermediate correction, the odds of this being a major top which would put an end to the bull market are not great. During this uptrend, the weekly indicators of the SPX had a bullish move to the top of their range and are now overbought, a condition from which they normally correct, but not one from which they start a major decline. On the other hand, the NDX weekly indicators are less bullish and are beginning to show negative divergence

Full article at source: http://www.marketoracle.co.uk/Article36023.html

The Stock Market Correction is Not Over

By: Andre_Gratian

Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are down and, if   they make their lows when expected (after this bull market is over) there will   be another steep and prolonged decline into late 2014. It is probable, however,   that the steep correction of 2007-2009 will have curtailed the full downward   pressure potential of the 120-yr cycle.

SPX: Intermediate trend – The intermediate uptrend is still intact and   so is the extended short-term correction.

Market Overview

It looks like the traders and investors took the “sell in May” mantra   seriously this week. (John Murphy)

In last week’s newsletter, when many EW analysts were heralding the coming of   wave 5, some – including yours truly – expressed skepticism that this was the   case. There were just too many technical factors that did not support it. What   happened this week, on Friday in particular, should convince even the most   entrenched bulls that the correction which started at 1422 in the SPX is not   over. Next week should leave no more doubt that what could be an important   decline has started.

I mentioned that two events could have a significant effect on the market:   the first was the jobs report which came on Friday morning and triggered the   biggest decline of recent weeks, and the other, the French election (and perhaps   even more important, Greece‘s) will take place tomorrow. Should there be a   radical change to the political status quo of either or both countries, we could   have a repeat of Friday’s scenario.

To me, the SPX activity during the last three weeks in March looked very much   like distribution. The fact that the index did not collapse immediately created   some uncertainty which caused the bulls to regain their conviction that new   highs were imminent. After Friday, it appears that a second phase of   distribution was created over the past month. On the Point & Figure chart,   the two combined make an impressive top with potential projections which, if   realized, could bring about a loss of at least one hundred more points before   the SPX can regain its footing.

P&F counts are not always realized fully, so we’ll let the market tell us   how far down it wants to go but, judging by the fact that the weekly chart   indicators just gave a sell signal this past week, it could take a while before   they get back in a buy position. In order to confirm that a serious decline has   started, the SPX has to break its 1357 support. Since it closed at 1369 on   Friday, this could be achieved in the first hour of trading on Monday if the   Eurozone election results spook the market and, if that happens, the first   target will be 1342, the level of the last wave 4 of lesser degree. Beyond that,   there are good P&F counts – supported by Fibonacci – down to 1245.

full article at source: http://www.marketoracle.co.uk/Article34527.html

Trading in the stock market? First learn simple technical analysis

 Two weeks ago, I was asked to accompany a friend to a free open evening hosted by this company Irish Institute of Financial trading

As a trader I am constantly on the lookout for reliable sources that would enhance my trading and give real value and insight as to how I could achieve independence in my finances. Having spent well over 50,000 Euros on every conceivable course type, from options to stock to EFT and even derivatives .I came to the conclusion that there is only one person that can look after my funds and that is myself There are no quick fixes that I can buy that will make me a professional trader and there are no insider tricks that I am not aware of or that I need to buy in order to become a successful trader. Trading is taking a gamble and almost all of the so called strategies require you to be right first time out in order to make money. Most companies I have dealt with maintain that they have the missing key and all you need to do is pay them to divulge this valuable information that only a very few people have in the market place. Some will contend that their software is the missing link and I have software up to my tonsils ,and I can honestly report back that it is of no use and a complete waste of time .I am of course talking here about the various software packages from Optionetics. (I have bought practically all of their products (Profit source, Advanced Get etc .(But other companies will sell you various versions of the same crap) only to find out that you are stuck with having to pay a yearly sum(currently  700$) to use your own software ,what a rip off ) having paid almost 5,000 $ for it in the first place !

Anyway back to the above evening .I am sorry to report back that this company is no better in fact their sales pitch was advanced on their clam to the possession of Pivot points and these pivot points were the reason there were “different”, According to the presenter they started out as a group of guys trading and they were horrified as to the amount of people coming to them not knowing the basis of trading so they decided to become educators instead !That was enough for me ,but I waited to hear more about these pivot points as in all my years of trading (15years) I had never come across pivot points before. Once the presenter showed us an example of these pivot points I immediately recognized what he was talking about. He was using nothing other than “Fibonacci retracement levels” Here is a  video that will explain this concept. But there are hundreds of such videos and each has their own benefits.

 you can just cut and past the highlighted text into Google search and you will get a wealth of information there.

I could go on and on from here but I was not impressed with their presentation .I believe that the Individual must take personal responsibility for their own financial destiny

I received this slide presentation from Chris at www.wealthbuildre.ie  I believe it is the very least you would need to know if you are contemplating investing in the stock markets .These are the main technical analysis indicators they use http://www.slideshare.net/quigleycompany/introduction-to-stock-market-technical-analysis

Good luck in your trading and remember when in doubt stay out!

A Short Biography of Leonardo Pisano Fibonacci

By Deb Russell, About.com Guide

Fibonacci Sketch by Kristin Palm


Also referred to as Leonard of Pisa, Fibonacci was an Itallian number theorist. It is believed that Leonardo Pisano Fibonacci was born in the 13th century, in 1170 (approximately) and that he died in 1250. Fibonacci was born in Italy but obtained his education in North Africa. Very little is known about him or his family and there are no photographs or drawings of him. Much of the information about Fibonacci has been gathered by his autobiographical notes which he included in his books.

However, Fibonacci is considered to be one of the most talented mathematicians for the Middle Ages. Few people realize that it was Fibonacci that gave us our decimal number system (Hindu-Arabic numbering system) which replaced the Roman Numeral system. When he was studying mathematics, he used the Hindu-Arabic (0-9) symbols instead of Roman symbols which didn’t have 0’s and lacked place value. In fact, when using the Roman Numeral system, an abacus was usually required. There is no doubt that Fibonacci saw the superiority of using Hindu-Arabic system over the Roman Numerals. He shows how to use our current numbering system in his book Liber abaci.

The following problem was written in his book called Liber abaci:

A certain man put a pair of rabbits in a place surrounded on all sides by a wall. How many pairs of rabbits can be produced from that pair in a year if it is supposed that every month each pair begets a new pair, which from the second month on becomes productive?

It was this problem that led Fibonacci to the introduction of the Fibonacci Numbers and the Fibonacci Sequence which is what he remains famous for to this day. The sequence is 1, 1, 2, 3, 5, 8, 13, 21, 34, 55… This sequence, shows that each number is the sum of the two preceding numbers. It is a sequence that is seen and used in many different areas of mathematics and science. The sequence is an example of a recursive sequence. The Fibonacci Sequence defines the curvature of naturally occurring spirals, such as snail shells and even the pattern of seeds in flowering plants. The Fibonacci sequence was actually given the name by a French mathematician Edouard Lucas in the 1870’s.

Fibonacci is famous for his contributions to number theory.

  • In his book, Liber abaci he introduced the Hindu-Arabic place-valued decimal system and the use of Arabic numerals into Europe.
  • He introduced us to the bar we use in fractions, previous to this, the numerator has quotations around it.
  • The square root notation is also a Fibonacci method.

It has been said that the Fibonacci numbers are Nature’s numbering system and apply to the growth of living things, including cells, petals on a flower, wheat, honeycomb, pine cones and much more.

His Books:
Liber Abbaci (The Book of Calculation), 1202 (1228)
Practica Geometriae (The Practice of Geometry), 1220
Liber Quadratorum (The Book of Square Numbers), 1225
Flos (The Flower), 1225
Letter to Master Theodore


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