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Fun With Fibonacci Flashbacks

Tyler Durden's picture





 

When a 'blog' puts the words Fibonacci, Gold, and Stocks in the same post, it well and truly earns its 'tin-foil-hat'-wearing "digital dickweed" honors. And so, we present, for the edification of all those who believe in gold as the only sound numeraire for judging value; for those who believe it's never different this time; and for those who believe in dead-cat-bounces; the Dow in Gold in the 30s, 70s, and Now...

 

The crash in nominal 'price' is followed by a Fib 23.6% retracement rally as hope triumphs over adversity... only for reality to rapidly re-emerge...

 

Charts: Bloomberg

 


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Wed, 05/08/2013 - 20:22 | Link to Comment fourchan
fourchan's picture

an ounce is an ounce is an ounce.

Wed, 05/08/2013 - 20:24 | Link to Comment Aeternus
Aeternus's picture

Silver is Silver, Gold is Gold. Keep stacking!

 

http://www.youtube.com/watch?v=deuC8GPr31A

Wed, 05/08/2013 - 21:22 | Link to Comment uno
uno's picture

found this interesting line on the interwebsssssss

Tungsten is not traded on an exchange, such as the London Metal Exchange (LME), 

REALLY !!!!!!!!!!!

Wed, 05/08/2013 - 22:26 | Link to Comment lesamourai
lesamourai's picture

It is, but it is not called tungsten.

Wed, 05/08/2013 - 23:51 | Link to Comment flacon
flacon's picture

Tungstein? 

Thu, 05/09/2013 - 15:19 | Link to Comment thisandthat
thisandthat's picture

Goldsten

Wed, 05/08/2013 - 21:32 | Link to Comment Dudeskis
Dudeskis's picture

So true. I love how people laugh at gold bugs when the price goes down. People in metals just buy more and look at it as gold/silver going on sale.

Thu, 05/09/2013 - 02:52 | Link to Comment dunce
dunce's picture

A pint is a pound the world around.

Wed, 05/08/2013 - 20:30 | Link to Comment lickspitler
lickspitler's picture

so 1 more small leg down in DOW/GLD before booom. rite ?

Wed, 05/08/2013 - 23:32 | Link to Comment JackT
JackT's picture

While it may look as though there is more time than originally anticipated. Previous downward trends have variance with regards to pitch.

Wed, 05/08/2013 - 20:37 | Link to Comment TheEdelman
TheEdelman's picture

ahah original post there tylers...  

buy bye DOW.  It was great while it lasted.  Next time use fib. 0% for fun.  Maybe price the DOW in popcorn too. heh

Wed, 05/08/2013 - 20:37 | Link to Comment mark mchugh
mark mchugh's picture

I don't really believe in Fibberace, but I'm sure we'll see the Dow/gold ratio at 2 again

Thu, 05/09/2013 - 00:08 | Link to Comment StychoKiller
StychoKiller's picture

Fibberace, quite the pianist...

Wed, 05/08/2013 - 20:39 | Link to Comment logicalman
logicalman's picture

To price gold & silver in paper is madness.

Value of paper = 0

Dividing by zero is ALWAYS a problem!

You either have some, or you don't (boat accidents are a bitch)

Long scuba lessons!

Wed, 05/08/2013 - 20:41 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

It only counts if you keep the X/Y axis scales the same, although I love the ANGRY RED ARROWS.

 

[Hint: if you keep the X/Y axis comparisons the same on all of them, it's just as impressive, and allows you the Scientific kudos ZH lacks atm. We do notice when you fuck around with the scalar plane you know]

Wed, 05/08/2013 - 20:41 | Link to Comment logicalman
logicalman's picture

Graphs come under the heading "lies, damn lies and statistics"

ALWAYS look at the origin!

Wed, 05/08/2013 - 20:44 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Of course.

 

But mapping the same graphs with a correct Y axis will state the same thing, the drive to make them all look visually the same through tricks is for chimps. Er, or traders, it would seem. [#supersecretcyclewavetheoryoftrading]

Wed, 05/08/2013 - 20:48 | Link to Comment mark mchugh
mark mchugh's picture

Note that the charts came from Bloomberg...

Wed, 05/08/2013 - 20:49 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

I might be snarking @ something other than ZH here.

 

Ahem. You apparently don't get $22 billion through honest reporting.

Wed, 05/08/2013 - 20:50 | Link to Comment mark mchugh
mark mchugh's picture

Noted

Wed, 05/08/2013 - 21:06 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

((I've been asked to make my snark explicit, athough I'm sure you got it))

ZH gets heavily squished for manipulating Y axis data to increase fear within the market; the fact Bloomberg does it all the time is apparently A-OK (and spawns a thousand million newsletters showing you how trading patterns ARE ALL PART OF THE PLAN)

 

Thus my reference to Scientific data. I'd prefer it if both sides didn't play silly games with graphics, but hey. ZH probably does a little less damage and has a little less control than Bloomberg, n'cest pas?

Wed, 05/08/2013 - 22:33 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

At least Bloomberg has the graphs.  CNBS just puts the nipples up and says FU, these are boobs

Wed, 05/08/2013 - 23:34 | Link to Comment JackT
JackT's picture

And CNBC's viewership is at an 8 year low

Thu, 05/09/2013 - 01:53 | Link to Comment John_Coltrane
John_Coltrane's picture

The best way is to normalize the axis for comparison:  x becomes (x - xref)/xref, y becomes (y-yref)/yref where xref is some reference year (say the last year in the time series), and yref is the price at the same time.  Then both axis lie between 0 and 1 in normalized units and relative changes are easily seen as well as scaling relationships between the time series.

Wed, 05/08/2013 - 20:49 | Link to Comment logicalman
logicalman's picture

By only showing a small part of a graph things can be made to look a lot more dramatic than they actually are.

Hence look at the origin.

Wed, 05/08/2013 - 20:50 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

See above comment.

Thu, 05/09/2013 - 09:42 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

If I had three ducks, one small, one medium, and one large, would they not all quack nonetheless, mr. smartypants? 

Thu, 05/09/2013 - 11:37 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

You are completely misrepresenting my question, you are not addressing it.  You are introducing an aggressive herd of minute horses, and I take umbrage to that.  That said, +1.

Wed, 05/08/2013 - 23:10 | Link to Comment WAMO556
WAMO556's picture

Marine Math

2 beers times 36 Marines equals 58 cases.

You have to factor in that sometimes (most of the time) shit just doesn't add up, hence the problem has to be FIXED.

Most answers to questions are a BEST GUEZZ.

Wed, 05/08/2013 - 23:18 | Link to Comment WAMO556
WAMO556's picture

I once saw this HUGE condensate cloud in the Hindu Kush following the valley floor into the pamirs. The tribal elders had an explanation of the phenomenon

Why is it that everybody thinks that nukes were used only on two occasions and no more??!

Wed, 05/08/2013 - 20:47 | Link to Comment Atomizer
Atomizer's picture

F(n)=F(n-1)+F(n-2)

The Fibonacci in Lateralus

 

Happy Birthday Bitchez

Wed, 05/08/2013 - 22:46 | Link to Comment ziggy59
ziggy59's picture

F(u)n= Rea(D/ng)0 -He(D)ge

Fri, 05/10/2013 - 11:05 | Link to Comment Kobe Beef
Kobe Beef's picture

Parabol slowed waaaay down. Meditative.

http://www.youtube.com/watch?v=Q5_eGEF5dGI

Thu, 05/09/2013 - 01:56 | Link to Comment John_Coltrane
John_Coltrane's picture

Or, more specifically, 1123581321...

Thu, 05/09/2013 - 09:32 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The ratio of subsequent Fibonacci numbers trends tward the Golden Ration (1.618...).  How's that for a limiting process?

 

Wed, 05/08/2013 - 20:49 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

GOLD BITCHEZ!

Wed, 05/08/2013 - 20:53 | Link to Comment sitenine
sitenine's picture

When's the last time you heard the phrase, "good as gold"? Yeah, I bet it's been a long while, because nothing is. Nothing ever really was...

Wed, 05/08/2013 - 20:56 | Link to Comment drbill
drbill's picture

I think I heard last the same time I heard the phrase, "its a free country". i.e. a long time ago....

Thu, 05/09/2013 - 00:25 | Link to Comment glenlloyd
glenlloyd's picture

Last time I heard that phrase was when Forbes was on Kudlow and they were discussing Ron Pauls run for chief executive back in 2008. Forbes said we should make the dollar good as gold...

Wed, 05/08/2013 - 21:04 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Now=Different.

Wed, 05/08/2013 - 21:11 | Link to Comment NoTTD
NoTTD's picture

"Dickweed"

 

Heh.

Wed, 05/08/2013 - 21:21 | Link to Comment MythicalFish
MythicalFish's picture

And the ratio has to hit 2 before it can meaningfully reverse. Just look at the chart! Not gonna settle for 6, that's for sure.

Wed, 05/08/2013 - 21:33 | Link to Comment spanish inquisition
spanish inquisition's picture

So mid 2017....Dow at 30k then gold is at about $4500. Dow at 9k, gold at $1384. Assuming the same fiat system in place, and no one has dropped the big one.

Wed, 05/08/2013 - 21:42 | Link to Comment MrBoompi
MrBoompi's picture

The paper pushers are doing us a favor by suppressing the gold and silver prices which allow us buyers to accumulate more ounces for the same paper outlays. Unfortunately they are also helping China and India do the same thing.

Wed, 05/08/2013 - 23:13 | Link to Comment Fuku Ben
Fuku Ben's picture

The first two times were decoupling from gold

The third times the charm where they partially reconnect to gold

http://wjyy.com/assets/images/100%20dollar%20bill%201.jpg

 

Wed, 05/08/2013 - 23:23 | Link to Comment WAMO556
WAMO556's picture

A lakh and a girl a day.

Thu, 05/09/2013 - 01:40 | Link to Comment polo007
polo007's picture

http://www.cnbc.com/id/100720823

The stock market, which hit new all-time highs on Wednesday, could experience a crash within two years, bearish economist Nouriel Roubini said on CNBC.

"It could go on for another year or two," he said, speaking from the SALT Conference in Las Vegas.

I see frothiness going to end up in nasty boom and bubble in asset prices, followed by crash and a bust, not this year, not next year, two years from now."

On "Fast Money," Roubini cited a couple of factors: "Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct somehow over time.

"But you have the gravitational forces of a slow economy leading eventually to correction, but then the levitational forces of QEs, zero policy rates, more money coming in the market, not just from the U.S. but other economies, is going to levitate asset prices."

Roubini said that those conditions could lead to "a generalized credit and equity and asset bubble next year or two, followed by a crash."

But, he added, "as long as the economy grows between 1½ to 2 percent and you have easy money, this market can go higher."

Thu, 05/09/2013 - 03:18 | Link to Comment dunce
dunce's picture

Several people have about the same time line forecast which just happens to be the end of obama's term. i wonder if they think a new administration would change policy or it will collapse of its on flaws  then. It will surely end but not end well.

Thu, 05/09/2013 - 07:27 | Link to Comment drdolittle
drdolittle's picture

Roubini called the last crisis just after it happened

Thu, 05/09/2013 - 01:40 | Link to Comment polo007
polo007's picture

http://www.cnbc.com/id/100718505

The bond markets will crash once global central banks stop buying debt, triggering a financial crisis much worse than the one seen in 2008, strategist David Roche told CNBC.

Roche, who has previously warned that "safe haven" government bonds are the most dangerous place for investors to be in, said Wednesday: "Yes it [a financial crisis] will happen and yes, it will be bigger [than the credit crisis]. Once you re-price the burden of the world's debt... the ugly truth will be revealed."

According to Roche, president of Independent Strategy, once the expansive quantitative easing programs initiated by Western central banks come to an end, sovereign bond yields, including U.S. Treasurys, German Bunds and U.K. Gilts, will spike significantly prompting a crash.

Yields on U.S. 10-year Treasurys have fallen more than 200 basis points over the past five years and are now around 1.8 percent. Meanwhile, U.K. 10-year Gilts and German 10-year Bunds were also trading near record lows on Wednesday at 1.8 percent and 1.29 percent, respectively.

"As long as the central bankers print money, the only way to have to distribute it is [for governments] to buy 70 percent of new bond issuance in these safe haven bond markets. As long as they go on doing that, the yields won't go up, and the day they stop, the yields will go up by so much we will have a financial crisis on our hands," he said.

Roche said the impact of a crash in the "safe haven" bond markets will be catastrophic for financial markets worldwide.

"You are looking at a massive capital loss on a mark-to-market basis for a lot of financial institutions in the world and for people who have put their savings into those bonds, which will hit demand and hit the real economy, because if wealth goes down people's optimism about the world economy will fade," he added.

In recent years, major western economies have embarked on expansive bond buying programs in attempt to prop up flagging growth following the credit crisis. But speculation over whether the U.S. Federal Reserve will end its expansive bond buying program, has risen this year. In the Fed's latest minutes, it emerged that several committee members were concerned over the risks of continuing its asset purchases for too long.

The end of QE has prompted concerns over how markets will cope unsupported.

Thu, 05/09/2013 - 03:24 | Link to Comment dunce
dunce's picture

They seem to have an idea that if they gradually reduce QE that they can go back to zero QE. I am afraid that scaling back will go quickly to crash or near as bad have little effect on the downward spiral.

Thu, 05/09/2013 - 07:53 | Link to Comment Dangertime
Dangertime's picture

The Dow:Gold ratio in the last chart should begin in 2000 when the ratio was 42:1, not 2006 with a 20:1 ratio.

 

Showing the third chart in that manner is rather deceptive.  I'm not saying the gold bull market is over, but I'm saying if we are to make a real judgement, we should have charts that are better representations of reality.

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