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How A 12th Century Mathematician Just Doomed Bernanke's Wealth Effect
Leonardo Fibonacci (1170-1250) may have just stuck his 'golden-ratio-based' fork in the equity market's rally. As the following chart shows, the diminishing marginal utility of Quantitative Easing's wealth effect has followed a rather remarkable pattern... and today marks the next turning point.
Applying a Fibonacci-based 61.8% retracement level to each of the time-periods following the March 2009 lows, produces a very interesting cycle overlay on the S&P 500 rallies...
(h/t Brad Wishak at NewEdge)
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77 x .618 = 47.59
Is that calendar days or trading days? And what happens after that? A shorter leg up and a shorter leg down?
What happens? In 48 days the election is concluded and Israel bombs the shit out of Iran. Turkey attacks Syria and Iran supports Syria. Voila! Entire oil producing Mideast is at war. Oil goes to $250 a barrel and the ES and DOW plummet to new lows. Never, fear the oil companies make record profits along with the Wall Street speculators. Enjoy!
So we have what?
Another 8 days or so before the next downturn?
Depends what happens in the LIBOR like CDS trade arena.
It all might just disappear like last time.
You don't have to follow Fibo charts to know that after each QE the duration of the rallies are becoming shorter and sell offs sharper.
Excuse the nerdy question... Wikipedia claims it was Kepler that figured out the golden ratio. Accurate?
I expect Benny to announce next week that the FED has found a way to make real gold in the lab and that the FED will flood the market with it in the next several years, so everyone should just sell their gold now, before the prices crater.
rouglhy speaking, the insuing pullback looks like its only to about 1400 though :((
that chart
just made me
fibbanocci my pants....
Federal reserve job posting.....
...
Alchemst wanted
salery comenserate with results
Fibonacci doesn't matter, sentiment does, it says next leg up please.
Fibonacci works well with elliott wave. Oil retraced 61.8% before resuming its drop.
http://bullandbearmash.com/chart/spot-wti-oil-daily-september-24-2012/
So, things are coming faster and faster....the next crash will be shorter and more intense and after that the next bull market will come even sooner until we're just HF crashing and bull marketing intraday...
I'm short DJIA futures that trade on the local exchange...in India o.O
I see the basic pattern there and it is a good observation, but, patterns can be deliberately created to then be broken.
Who thinks the PPT doesn't understand these things, and that they don't paint the tape to make it look like familiar patterns are playing out?
Although I almost never make predictions, I don't see any significant changes in the S&P 500 (downward) for the next couple months (barring a gray/black swan). I don't think there is going to be a significant retracement because it is too close to the elections. If we had a free market, maybe it would be different, but with all sorts of actors with a vested interest in continuing the status quo (however fragile it may be), I think major market moves are increasingly unlikely as the election approaches.
Is that a mistake in calculating the first curve? From March to nearly the end of the next March is a lot more than 268 days...........
Try TRADING DAYS.
It was Robert Rubin himself who once said, "The market goes up; the market goes down."
Gotta watch those fingers on the Ouija board.
December 2012.... here we go!!!!
Skipping school? Cutting class? Trying to dream up some sort of conspiracy theory when QE1 was done at lower prices, and the same for QE2, and now QE3 is done at High prices. Why now? Think. Think why.
hmmm,,,, 'in order for the Big Money Boys and Girls' to get out at highs, before the Little People figure it out? O' please do tell us why, LWW.
Most any answer will suffice tho, and still we get the selloff with or without a reason. It appears it is coming as shown below. The Fed just jump started it. That is all they ever do. Then the snowball runs down the mountain,,,and the avalance starts because this time, the snow pack allows it. Same as the last 2 or 3 times. Value can't go thru the roof, can it. Can't have that. Value has a cap on it.
Or not and we go up.
To know how has already been shown on ZH 'where to figure it out', here: http://www.zerohedge.com/news/2012-10-13/forget-666-808-number-markets-b...
"for ye must learn how to properly draw such fibs correctly" Or not, as ye see fit.