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The current Fibonacci retracement visualized in both price change and time.
And now the same from the 2001 lows.
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Great chart. If you haven't checked out the wave59 charting platform, they use an interesting annotation called the fib vortex. displays both price change and time utilizing the golden spiral.
Strange things start to appear when you square the chart.
Tyler, excuse me, looking at those charts with circles are we in kindergarten or something? Never believed one would find such b/s here.
You have a great blog otherwise.
dick
Now now Vlsrs behave. Go stand in the corner until playtime as punishment for this personal attack.
no thats not dick
thats richard cranium
Naive on ur part. One of the best traders I know uses French Curves
Or that's what he told you
DUDE, ABOUT 90% OF THIS BLOG IS THIS KIND OF VOODOO CRAP.
OTHER THAN THAT MRS LINCOLN, HOW DID YOU ENJOY THE PLAY
I'm a payer at 90%.
yuh huh. Technicals are voodoo magic. Patterns are an illusion....
[/sarcasm]
What's not an illusion is TD long SDS at 100.
there's nothing wrong with making fun of the elves.
Some technicals are voodoo magic; others actually work
Fibonacci retracements definitely fall squarely into the "tea leaves and Tarot cards" category, and anyone using them deserves what's coming to them.
What you all aren't realizing is that the market is made up of people, whether small individual traders or large institutional traders. You can have "voodoo lines" that have no meaning, but if enough of the people that make up the market use them and trade off them, they suddenly work if for nothing than a self-fulfilling prophecy. No more voodoo than a P/E number that has no definition of high and low, only what market participants have arbitrarily chosen to be high and low.
I paid for university using this "voodoo". So please, ignore them and be on the other side of my trade.
Actually, turdface, he's giving you a gift. Personally, I wish this was not posted, as we don't want yet another tool going broad public and forcing us to look elsewhere.
Amen. I was hoping this would stay quiet.
Uh huh. If that were the case, you guys would be making fun of it. The fact that you're "complaining" about this being "revealed" makes me suspicious :)
Agreed. Some of us make a nice living using things others think is "voodoo". I would be very happy if this were taken down.
Dumbass comment. Technicals are how you measure the psychology of the herd, which is all that matters for trading, now more than ever.
How would fundamentals help you trade this market (other than to stay away), when the PE is basically infinite on a TTM basis?
agreed
how do you trade, with your "intuition"?
"there's no way lehman goes under, I'm going long...."
loser
http://www.marketwach.com/story/us-stock-market-to-test-july-lows-analyst-says-2009-08-11
This was actually published in a major MSM specialized outlet; that's got to be saying something; this fucking swinging moods between hyper-optimism, and hyper-pessimism define the market as bi-polar ( some poster called me that so i found it appropriate to find something else ( ie. the market) which has the same disorder as i do)
I think you are the worst poster on this site - you offer nothing.
lol, I agree, cheeky is -0
+1
EDIT: -0, wow dude; you invented a whole new mathematics just to trash me; i for one welcome your ingenuity
I appreciate your cheek +2
I'm just not down with the Cheeky point system. I don't understand it. If you appreciate Cheek then wouldn't you throw him a bone while he is under attack like this and plus him 10 (+10)?
A +2 is an insult so you really meant to say "I don't appreciate your cheek" right? You just did it in a kind and caring way.
I'm ambivalent about individuals, but I hardly think you're worthless.
The discussion about Weimar Germany/Schacht was both enlightening AND engaging - and you made many excellent points.
I'm not a technician, but I can appreciate it's value. I was looking at the overall trend from the 2001 bottom to the 2002 "mini top" - the pattern, while much larger today, was the same shape and duration. Patterns have a way of repeating - making them patterns (LOL).
I think we are very near the top if not AT the very top. But the money being printed can push us farther up the ladder, if Uncle Ben keeps printing and printing.
Of course, when the final rung breaks, it's going to be a very ouchy kind of fall.
thank you
great thinking. There is no mistake in claiming that all the money that is being printed is partially used to push the equities up. And i also think that trend will continue for some time to come, and while we might have some retracement days of 2-3 % i don't think that the political establishment will allow for the equity markets to slide to March lows. The problem with inflation in short term is that is highly improbable, taking into account that the lending standards have been re-defined, that consumer is un-willing to go further into un-necessary debt and that the productivity of businesses has dropped. While the overall economy is in a deflationary environment and will continue to be in it until either productivity, or demand pick up, there is no mistake that with all additional capital the equities will continue to go up. As i have said before, the market in is only a segment of the economy and not a representation of it; and it is false just to look the market for signs of the health of the overall economy.
Agree.
They will prop it until the system completely breaks. In the meantime we'll hear the rallying cry: "Buy the dips!" : p
I trade small caps, my target is $54 on IWM for a turnaround. If I go long it will only be for a day trade, as I expect the market could open down 3-5% at any time, and if it gets away from "them", it'll be look out below...
I like you CB.
I like you CB.
Well... since you don't even consistently define who you are by registering... then nobody can offer an opinion about your comments... kind of safe behind there I bet...
I think it would be helpful to overlay the fib. circles over other market crashes (nikkei, 1929 etc) and see if some comparisions can be made. On its own it doesn't tell much, unless there's a historical precedent for not getting past the current circle, but I don't have b-berg access for a few days. If someone could post that would be nice! Thanks all. -Red Raider
can't really make the fib retracements in the 2001 chart.
Yummy yummy yummy, looks like honey for my tummy..
So either everything goes sideways, or we have a small correction and head toward 61%?
means what?
Rosie via ZH around May 1st..
We don’t really share the view that the recovery, if and when it comes, will be sustained. We understand the historical record that even in the face of monumental fiscal and monetary easing, it takes a good four years for the economy to work through the aftershocks of a collapse in credit and asset values. While most economists are now waving the pom-poms, we find very few marketmakers who share their enthusiasm.
From Jeff Coopers' report this morning entitled, hilariously, 'Would Ayn Rand Fade a Dead Italian?
A .382 Fibonacci retracement of the entire bear market from 1576 to 666 equates to 1005/1014 S&P. At the same time a 5/8 retracement from the 1974 low of 62 equates to approx 1007 S&P.
A cluster of Fibonacci cycles, natural cycles, decennial cycles, and 'square out' or Gann cycles create a greater likelihood of a turning point.
+ 0.618
sqrt(5)-1
+ ———————
2
Heavy resistance ahead of us. That breakaway gap from October will prove tough to close, if it will even be tested....
So that's how the fib arc's work... ok, got it... thanks TD!
I don't want to get ahead of myself but it looks like we might be headed for an actual down close, unless some shananigans happen in the last half hour to retrace 90% of the decline, which is possible.
Closing above zero is a relative win for the bears.
In that vein, why do they insist on trotting out this know-nothing, gravely-voice fuck on cnbc at least once a week?
Covered my short now. GS gonna use some of that TARP money and jam the market higher in the final hour as always. peace out.
Hey, look. The market jammed LOWER in the final hour.
You fail at speculating.
Actually, I'm going to say we don't break 996 today.
Maybe 997
Possibly numerology at play, we bottomed at 666 as reported - we could top at 999 (another 666 upside down) and it could be a sell signal for those connected. 9/9/9 could also be used as a date. ;)
If this is a controlled market, they would have to get a message out to those in the know.
Yes it is all looking very masonic in nature, does anyone know if mars is passing between venus anytime soon? Ohh wait, yes it is, in fact it should be as close to earth as it will be in our lifetime the last 2 weeks of August.. gettin kinda weird...
Insert Uranus joke here ______________.
Oh, I got one....be careful you don't get Goldman's sacks up Uranus.
Excellent!!
the mars proximity thing: true if you were born after august 27, 2003 and die before 2018. but certainly true if you make it to 2288.
Damn that google disinformation! flaged @ whitehouse!!!!
Yes now I see, I was forwarded something that is out of date... somebody's keepin' me on my toes...
Ok, that seals it, all bets are off, this market is goin' higher...
OT: AN,
speaking of numerology, we are currently at the hands of the 111th Congress. As I'm sure you know, 111 is a very powerful number for numerologists.
End of day buys are about again to make sure the shorts don't have an easy time of it!
@33084
http://blog.afraidtotrade.com/chart-art-sp500-gann-and-arcs-july-28/
plain and simple this market is rigged...stick saves for the past 9/10 sessions
Ummm ... OK, Einstein, where was the stick save today?
I bought FAZ at the open and BGZ and TZA at 3 PM. Oh money, how I love it! I think I will go to the money room and roll around in it for a while.
Damnit, here I is again, a one man RIA ain't got crap 'cept hand done P&F, figuring daily H/Ls for my trailing stops --- in my sick wet dream i turn my computer on and have a free bloomberg terminal with 5 years of Eagan Jones.
Constance Brown is just up the road from me, but who in there right mind can deal with Gann??
14:44 11Aug09 RTRS-U.S. PRODUCTIVITY REPORT CONTAINS ‘ERRORS’ ON COMPENSATION,
UNIT LABOR COSTS - BLS
14:44 11Aug09 RTRS-BLS SAYS WILL ISSUE CORRECTED VERSION OF PRODUCTIVITY REPORT
‘AS SOON AS POSSIBLE’
14:44 11Aug09 RTRS-BLS OFFICIAL SAYS ERRORS WON’T AFFECT Q2 PRODUCTIVITY, BUT
Q2 UNIT LABOR COSTS TO BE CORRECTED
What about all the errors in the jobs figures!!! About time they corrected them isn't it??
I have a "polyvariate" for Durden. http://moneyhockey.blogspot.com/2009/08/damn-you-durden.html
da best )))))))))))))))
The first chart made me laugh, thank you.
Internals on the market are pretty negative so they must be just using a few big weights to hold it up as high as it is.
with a half hour to go this last hours volume projects to be as great as the first hour ...
is interestng ... to me anyway....
does the volume die on the vine or accelerate into the close.
EDIT ... good lord .. not sure what I was looking at ....need to be a monotasker with my pea brain .......sorry. back under my rock.
we rallied back to where supply overcame demand, is looking like stuffing to me ....
but what the hell do I know.
Interesting charts, ty.
Later, Robo Trader will be identifying a significant Steatopygian breakout in the developing Thigh & Buttocks pattern.
that's funny charts
but what's the point, you always have 50/50 chances to break or not to break, no matter what
A blasphemer among us!
""For reasons that are unclear, these ratios seem to play an important role in the stock market, just as they do in nature, and can be used to determine critical points that cause an asset's price to reverse. The direction of the prior trend is likely to continue once the price of the asset has retraced to one of the ratios listed above. The following chart illustrates how Fibonacci retracement can be used. Notice how the price changes direction as it approaches the support/resistance levels.""
I'm sold, er, selling.
http://www.investopedia.com/ask/answers/05/FibonacciRetracement.asp
People give Fibonacci charts a hard time, but recent study on crowd "wisdom" works really well to explain how any system with many players ends up exhibiting odd emergent properties:
http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds
Read that, while thinking about how asset prices might be induced to run in certain troughs of reasonable expectation because we all know what is reasonable (or think we do, which works equally well).
cougar
Don't you think there are far better ways to measure those emergent properties than Fibonacci retracements?
Besides, look at all the money that Bernanke printed. How does that affect the money supply? Don't you think that affects stock prices on the right side of the Fibonacci inflection point? And doesn't that kind of invalidate Fibonacci retracements?
[far better ways] Absolutely, though I'm not 'leet enough to drag any up. Well actually I don't care outside of the abstract pleasure of seeing how the universe turns in on itself at log scales.
As a practical matter, Fibonacci retracements are probably interesting models of how humans toss a dart and hit a point on the future target that within some mathematical distribution indicates "well that's probably about as high/low as it will go". We tend to think fractally, which is a way of saying that we think in patterns that retrace even at smaller and larger relative measures. Like people say now, billion is the new million. Time was when the ancients thought that anything over a million was infinite, and in their world this was essentially correct. But add three zeros, play the game at a different inflection point. It goes up, it goes down, but our models of "how high is high" and what is beyond the risk horizon are still the same.
The idea that all the players are rational is nonsense. It's impossible. Most are followers reacting too late, only a few are leaders who understand what they are doing and lead the market slightly. Of the leaders, a few are really working with enough information and the rest are good guessers groping around the edges of exact prediction. Of those not guessing, most are not really working in the public sphere at all, you never directly see what they are doing nor will you be able to prove causality. And yet -- their models of the world are driving the other thinkers in abstract, who in turn make public moves that telegraph... well what do they say to us? Not much more than the thinking of perhaps 100 men and women in the world with enough information, money and influence to do non-random things in advance of the rest, but who are otherwise invisible.
Not conspiracy. Just how the world works. The information transfer between parents and their older children in whom they confide, and then between older and younger siblings, and then between young children and their pets, work exactly the same and with as much fidelity, and each player at their level moves like a rational actor. Oh hey, that's fractal isn't it? My my.
As information degrades in translation the further from the source the players make moves in the market that are more random, or seemingly so. They don't know they are more random than someone else but by the nature of the information flow they must be. A Fibonacci series of market moves can be thought of as the visual manifestation in prices of how the ping-pong ball of buy and sell signals (which is just a proxy for broader economic growth/shrink signals acting at the global level) bounces along in the human conversation. The long moves are the main movers moving slowly over the decades, over centuries. The annual moves are institutions who by habit and SOP are stuck looking at as long a signal as they can glean, but seldom over a decade. Quarterly moves are corporate earnings reflecting good and bad guesses about the long signals. The tiny day moves are retail traders -- playing against each other, playing against robots, playing against rumor -- as if it were a game they understood.
Well they don't. They can't. They never shall. The line of the market moving slowly over the years is as close as any of us will ever get, like watching the finger of God slowly writing in the sky. You have to sit a long time, but then a pattern emerges, just in time for the slow winds to blow it over the horizon. But it was there. I swear. Someone knows what they are doing. Maybe that's OK.
Sorry to kill anyone's buzz. But it's OK to be pwned if you can still make a little money just ahead of the signals. It only ever was a gamble. And maybe somewhere -- some when -- someone knows what they are/were/willbe doing.
cougar
bravo coug'
If it breaks past the 50% Fibonacci retracement then it is more likely that we'll see major upside... unless, of course, it is a false breakout and recrosses the 50% retracement line. Likewise, if it fails to cross the 50% retracement line then we are unlikely to see upside until it does.
Also, if the Yankees make the playoffs, it is more likely that they could win the World Series... unless, of course, they lose in an earlier round. Likewise, if the Yankees fail to make the playoffs then we are unlikely to see them win the World Series.
"It's like deja-vu, all over again."
Makes sense to me....... :>)
It's like Tim McCarver. OH YES. CNBC should hire him!
He had a good one this weekend: "Playing with fire is a lot different than playing with fire in your eyes."
Market Charts are supposed to represent a graph of collective human emotion, with Fibs adding the patterns-in-nature layer. Sadly, TA seems more likely now to be used as a guide to fabricating sell signals in order to generate short squeezes. And of course, HFT algos have no emotional input. How much of TA has been rendered virtually useless?
That's true. Every trading tool becomes extinct at some point.
Unless the robots have acheived consciousness (WPOR / HAL 9000), people programmed the algorithms and used a combination of goal seek (targeted figures), fundamentals, and technicals - probably using hundreds if not thousands of variables. Remember those super duper Pentagon computers - some of the exchanges have been led by former CIA brass, so this financial "battle" is one of mathematics and heavy computation. Since Deep Blue won in chess, we mere mortals have been at a disadvantage.
I wouldn't say that *all* mortals are at a disadvantage.
Mortals who don't understand programming are at a disadvantage against those who don't. People who try to approach investing with the outmoded concepts of modern finance, the better.
As a software developer, I'm quite happy with this outcome ... The sooner we put all the dumb fucks on Wall Street out of jobs, the better.
yer catching on.
the old t&a is done.
the new t&a is disemboweling the botscam.
i liked the old t&a better, but sometimes a milf is all you get.
Bully boys are back to squeeze new shorts and bump it back up to 1000 on the S&P
*WSJ: Taylor Bean Bankruptcy Filing "Imminent"
Huh, no WOPR today?
Some minor Treasury Auctions coming up, word is (not the gimme short mats). WOPR buy UST, no SPY.
The pump isn't working as well these days. Still they got a bit of a squeeze.
Now there's a change for you.....last 15 minutes SPX went from 998.5 down to 994.17.
Are we witnessing a change here??
Once in a while the markets are allowed to be rational, just to fuck with your head a little.
Oh my 50 percent is not enough. So many fools running on hope and greed if i just leave it there i hope it will go up more. Same fools who lost big last year. This chart means something best to look at your positions and trim and not get greedy.
Chew on this one. Lighter volume the last couple days, less people want to buy into the rally at this point. What's the best way to extend the rally then? Bad news for a couple days, lure in the shorts who think this is the turning point and then blammo, squeeze them, make them cover and you now have the buyers you were looking for.
Reasons for a manufactured ramp next two days: we have Fed meeting which will result in no rate increase, and some language that makes things sound better than they are. Followed by retail numbers juiced by Cash for Clunkers.
Anyway, Thursday afternoon looks like a good time to back out and wait for September to me. I won't be giving them shorts to squeeze however.
I keep looking for the chart of what the Fed is going to do.
(not necessary, the Fed will print money and the stock market will go up. Who needs a chart for that?)
The next question is what the Fed will call quantitative easing after it announces the end of quantitative easing?
I for one can appreciate a beautiful woman that embodies fibonacci principles, the curves on these charts are a bit two-dimensional and not quite as pleasing.
For the true believers, Robert Prechter, president of Elliott Wave International, is calling for a long-term rally in the U.S. dollar that could last a few years. This is probably the leading organization utilizing fibonacci numbers, and he just called the bottom.
If the dollar does strengthen, commodities and equities could slide (deflation).
Precter's great, except of course for the 20 years he wasn't so great, but if you want to follow him like Dorothy followed the YBR, be my guest.
Seriously, the most important thing on that chart to me is the straight line from the September 2007 top to where we are today. I see a bunch of touches and unless I miss my guess, we're about to do a 180. I realize that isn't all high tech, but hell, it's sitting there, staring me in the face and sometimes it really is that simple.
These are worth watching from Prechter:
http://finance.yahoo.com/tech-ticker/article/299205/Bob-Prechter-%22Quit...^DJI,^GSPC,SPY,DIA,QQQQ,^RUT,BGZ
http://finance.yahoo.com/tech-ticker/article/298957/Dollar%27s-Hit-a-%22...^DJI,^GSPC,UUP,UDN,TBT,GLD,SLV
He pretty much called the bottom in 2009, predicted the 1987 crash and the 2008 peak in oil prices, but he is not always 100% accurate.
Nobody is 100% accurate. But Goldman sure seems to come close an awful lot.
I find these Bloomberg posts really interesting. However, I don't understand them so well. I'm assuming the arcs in the upper graph represent levels of resistance. Perhaps in future posts like this you could explain further what the graph is showing, or provide links that do.
Thanks for all your great stuff, Tyler.
TD plotted the fibonacci fan on the SPY. Yes these arcs show support/resistance.
www.stockcharts.com is a great place to start.
Beavis says "Coooooool"
Anything Fibonacci-related is completely and totally bogus.
The charts on this page do not really correlate to the Fibonacci retracement levels shown.
I would sooner trust my magic 8 ball than a Fibonacci retracement.
dipshit
I think you are missing_a_link... Did you mean to be at the yahoo message boards?
what a day
M. Link you have to be a new trader - or one that doesn't carefully observe your charts. Also- we never believe anyone who says they bought/sold something AFTER it has proven to be right. Post your calls when you make them THEN tell us about your theories on technicals.
Multiple fib retracements with 2003 recovery as well. I like 'em as a solid ref, but they are not the bible.Amazing how 61.8 repeats throughout nature if you look at it.
We are bound by laws we do not understand because -- we are bound by them. We were bound by gravity for 5 million years before we even knew there was such a thing. And even knowing there is gravity hasn't allowed us to understand how it works.
People tend to discount what binds them, because they cannot change it. A few of us are fascinated by the limits. The patterns in the universe are shadows of the limits projected into our local space+time. See how they move! See this pattern emerge! Now it is gone! Is that awe-some or not?
I could write a computer program to model the entire stock market since any past date, and into any future date. Exactly. Because somewhere -- some when -- everything that will drive the market has already happened. All I lack are the exact vectors and the exact initial parameters. That's it.
Of course, that's everything in the universe. And everything binds us fast, is the water within which we swim and the knowledge of the girth of the oceans is not shown to the fishes.
Swim on, playerz.
cougar
beautiful post
Your post made me think of the movie Pi.
No you can't. The market doesn't conform to any laws of physics for which such models could apply. The market conforms to the laws of psychology, which are notoriously unquantifiable and mostly unknowable.
actually, this is not true; psychology would just be one of the known determinants in P0 ... http://en.wikipedia.org/wiki/Chaos_theory and http://en.wikipedia.org/wiki/Pierre-Simon_Laplace
bears win a day...about time
Chicken Little is right. The sky is falling. But not the way everyone thinks. Economies are a controlled game. Thats the problem. If you took all the money that you have and spent it tomorrow, ( On a long enough timeline the survival rate for every chicken drops to zero) the net result is you would be in the same cage you are today. The trouble is coupon collecting. Spend the wad and enjoy yourself. If you can get credit spend that too.When they come to take it all, give it to them. You may find they don't want it back and the economy will keep on rolling with or without any of us. Afterall who got the bailout money? The big banks.Auto industry and other control freaks. Whose money were they supposed to be protecting. Yours! Whose money did they use to bailout out the big banks? Yours! Did they give you any money? NOPE. Why. Cause if you had the money you would just spend it on silly things like food and children and living a peaceful happy existence. Maybe buy a new car. That may have taken care of the auto industry problem. Maybe paid off your house . That may have taken care of the mortgage default problem. But no, lets just give it to a few large uncontrolable entities and keep all the money frozen. I Know the concept is simplistic but you can't have coyotes guarding the hen house and expect your hens to be there in the morning. The meat will be gone, but I suppose you can always make pillows with the feathers that are left.
"Lyapunov exponents", google it. Over a short period of time, the market becomes unpredictable, based on historic prices. In the same way you cannot forecast the times of a dripping tap.