i do like my self drawn chart of the ASX200 (weekly) though with my calculated Fib levels on it - calculated from the all time high just under 7000 to the March 09 low.
What i find interesting is that the 50% level at 4922 was a period of consolidation on the way down (the blue box) and has been been a strong level of resistance on the way up
As I said on another thread it is also interesting that one could say that the ASX2000 has ranged traded for over six months between the 38.2% and 50.0% levels
If I did bother calculate it I would probably find that the width of the channel on the way up from March 2009 is also a Fib number
Maybe ASX200 at 5000 is around about a 50% Fib level ... or it might be the emotional attachmennt to round numbers that is making the 5000 point so important in some people eyes
Summary of raving - Fib levels are interesting and have a lot of merit as nature does seem to play out so often .... but dont work in all cases
Would aslo say that in the short to medium term I would only use Fibs based on the most recent significant top to bottom or vice versa
Gosh Peat, if I am being ridiculous backtesting 30 years of Dow data, how silly were Batchelor and Ramyar analysing three times that amount!
Did you read the paper they wrote? Here is the abstract :-
"We examine whether ratios of the length and duration of successive price trends in the Dow Jones
Industrial Average cluster around round fractions or Fibonacci ratios. We identify turning points by
heuristics similar to those used in business cycle analysis, and test for clustering using a block
bootstrap procedure. A few significant ratios appear, but no more than would be expected by chance."
I do like my self drawn chart of the ASX200 (weekly) though with my calculated Fib levels on it. What i find interesting is that the 50% level at 4922 was a period of consolidation on the way down (the blue box) and has been been a strong level of resistance on the way up. As I said on another thread it is also interesting that one could say that the ASX2000 has ranged traded for over six months between the 38.2% and 50.0% levels Maybe ASX200 at 5000 is around about a 50% Fib level ... Summary of raving - Fib levels are interesting and have a lot of merit as nature does seem to play out so often.
I appreciate that you find such a chart interesting and useful, W69. These qualities are not there because you have used Fibonacci levels, though. You consider that the 50% mark is especially significant, but I feel obliged to point out that this is not a Fibonacci level! Let's follow through on that idea though, and plot 2 further 50% levels, and yet again, such that the retracement is now divided into 8 exactly equal parts. Here is a set of four charts comparing two using these arbitrary 12.5% increment levels with your version. Take a look and see which one you think works best......
The way I see it, W69, is this. You could have a chart that does everything your old one does, only better, more accurately and faster - without resorting to magic numbers, mysticism or numerology!
...personally do not use Fib-levels for trading and there is a lot of mixed opinion around their merits; I assume that if trading hits a Fib-level, it would be one indication of something happening in the market at that point which should best be confirmed by another trading system
...however, institutional movements track better technically than any of the other indexes. For instance, on October 11th. 2007, the Institutional "core holdings" index hit an EXACT 61.8% Fibonacci retracement while the other indexes did not. That day marked the EXACT top of the market.
I need to learn about charting. After all these years I still have no idea what you guys are on about. Stop telling fibs! LOL
The market wants to come down and waiting for any good reason to go up. I think the market has Already factored into good reporting period. Any disappointment will see it getting smashed.
This chart from chartoftheday.com suggests that some time in the future the DOW will br back to 5000-6000 before it gets to 15,000
]For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest. For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, the inflation-adjusted Dow is a little more than double where it was at its 1929 peak and trades 61% above its 1966 peak -- not that spectacular of a performance considering the time frames involved. It is also interesting to note that the Dow is up 65% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.
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Originally Posted by winner69
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