Posts Tagged ‘fibonacci retracements’

Fibonacci Rules – Sometimes, the Old Ways Are the Best!

Crazy stuff, right?

If you have never before paid attention to Fibonacci Retracement Levels, I would strongly consider paying attention to the S&P chart below.  This chart shows, 2 years later, a consolidation and breakout that could have been predicted in March of 2009.  That's right, if you asked a Fibonacci technical guy where the S&P was going to consolidate on March 10th of 2009 – he would have said: "Assuming that yesterday was the bottom and coming off our high of 1,576, then I would say we will consolidate between 1,014 and 1,229." 

Leonardo of Pisa (and independent republic at the time) was born in 1,175 and died at the ripe old age of 65.  Pisa was a city of about 10,000 people – a mixture of Muslims, Christians and Jews.  Construction on the great tower began in 1,173 and was not completed until 1,319 (so don't complain about modern union jobs!) but they knew that it was listing in 1,178 so the point is: Leonardo was born in a small town that had a huge architectural  problem.  

Fibonacci's father was a State customs worker (essentially overseeing floor trading) and encouraged his son to take up studies in mathematics which, at the time, included learning Hindu Vedic math, which was the foundation of modern algebra and which Fibonacci came to greatly respect, saying:

The knowledge of the art very much appealed to me before all others, and for it I realized that all its aspects were studied in Egypt, Syria, Greece, Sicily, and Provence, with their varying methods; and at these places thereafter, while on business. I pursued my study in depth and learned the give-and-take of disputation. But all this even, and the algorism, as well as the art of Pythagoras I considered as almost a mistake in respect to the method of the Hindus.

Thus Fibonacci became the driving force by which Hindu-Arabic numerals came to replace the Roman ones.  Fortunately, at the time, the arts and sciences were still supported and he found the favor Emperor Frederick II, who funded his studies – even though they didn't make him any money (imagine that!).  Fibonacci did not invent Fibonacci numbers (it was probably India's Pingala in 200 BC), he
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A Classic “Fade The Gap” Day

A Classic “Fade The Gap” Day

Courtesy of David at allabouttrends.net

“What’s so special about 1130? It’s downtrendline resistance and a 50% fibonacci level” [Click here for a video on Fibonacci retracements.

One look at the SPX chart below tells the story, all in a news driven pop based upon the Yuan.

Sure enough the opening gap took us right to those levels.

So are the markets really up today or are they down? Just look at the two charts below.

 

So in answer to the question of whether we are up or down for the day — how about BOTH?  To those who have been in the market before Friday’s close yes it’s up.

But to those who had to chase the market at the open and REACT AFTER THE FACT the market is down. This is what they mean when they say “Fade The Gap”. Folks going into today we were overbought to begin with and the Chinese Yuan news was just the icing on the cake to set up the fade the gap and lock in some gains.

Think about it, anyone who basically bought anything today is basically down from their entry.

Moral of the story — listen to the charts and above all NEVER CHASE BUSES BY REACTING. 

The markets are stretched and hitting key resistance levels and a lot of individual stocks are also showing this — AKAM, SNDK,NFLX — all have technical indicators and nano-timeframe toppiness showing up as well. Right now we are going slow and protecting what we have.

“What Do I Need To See To Make Me Take A Trade”

You would do yourself well by printing off that phrase and pasting it to your monitor somewhere to keep you focused and to ingrain it in your subconscious.

On the long side it’s all about “Pullbacks Off Highs” patterns.  It’s really all you need to know and how to trade them of course.

To learn more, sign up for our free newsletter and receive our free report — “How To Outperform 90% Of Wall Street With Just $500 A Week.”

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Adam at Market Club put together a lesson on Fibonacci retracements, an important tool many traders use to determine turning points in the market. Like all tools, it has its flaws and should be…
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Phil's Favorites

Momentum Monday - Growth Stocks Have COVID and Ivanhoff Lived

 

Momentum Monday – Growth Stocks Have COVID and Ivanhoff Lived

Courtesy of Howard Lindzon

Happy ‘markets closed’ Monday as we pay respects to Martin Luther King Jr.

Last week Ivanhoff had COVID, but the young scrappy man beat it.

We cannot say the same things about growth stocks which continue to struggle from the financial cocktail aftermath of it.

Here is this week’s episode of Momentum Monday. You can watch/listen right here or I have embedded it on my blog below:

Here a I...



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ValueWalk

Trillium Gold Mines (TSXV:TGM): How This Gold Company Might Hedge your Inflation Risk

By Adam Torkildson. Originally published at ValueWalk.

Investors are concerned about inflation and justifiably so. Consumer prices spiked in 2021 to levels not seen in decades in the U.S. and Canada; in fact, for most global economies, 2021 marked a sharp break from what has been an unusually long period of low-to-moderate inflation. Are we headed for a repeat of the 1970s when inflation reached double digits? If your investment does not generate sufficient returns to beat inflation, one thing is certain – inflation can erode the value of your portfolio, even if you maintain positive returns year-over-year. Many younger investors have never faced this invisible drain on their purchasing power.

Historically, gold as an asset class has proved its worth time and time again as an effective hedge against inflation and econ...



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Politics

What Supreme Court's block of vaccine mandate for large businesses will mean for public health: 4 questions answered

 

What Supreme Court’s block of vaccine mandate for large businesses will mean for public health: 4 questions answered

New York City’s vaccine mandates are unaffected by the court ruling. AP Photo/Mary Altaffer

Courtesy of Debbie Kaminer, Baruch College, CUNY

The U.S. Supreme Court on Jan. 13, 2022, blocke...



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Zero Hedge

Ghislaine Maxwell Will No Longer Fight To Keep Epstein 'John Does' Secret; Suspected Of 'Intimate Relationship' With Prince Andrew

Courtesy of ZeroHedge View original post here.

Convicted sex offender and UK socialite Ghislaine Maxwell will no longer appose keeping "vast swaths of information" about her "sex trafficking operation" with Jeffrey Epstein sealed, after accuser Virginia Roberts Giuffre requested they be made public, according to the Daily Mail.

One of Maxwell's lawyer stated in a letter to federal judge Loretta Preska last week that the defense team will no l...



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Chart School

US Dollar Short Term Cycle Peak Near - Update

Courtesy of Read the Ticker

The short term US Dollar cycle peak is upon us, it is time for capital flows to rule the direction of the DXY.



Previous Post: US Dollar Short Term Cycle Peak Near



Capital flows and interest rate differentials move currency around.



If capital flows take over, then they DXY is going into the 80's at least. Of course hiking rates 4 times is easier on the world when the DXY is near 80 rather than 95. A lot if US debt held by emerging markets is at risk otherwise. And yes a lower US dollar in early 2022 helps China out, as it suppo...



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Biotech/COVID-19

What Supreme Court's block of vaccine mandate for large businesses will mean for public health: 4 questions answered

 

What Supreme Court’s block of vaccine mandate for large businesses will mean for public health: 4 questions answered

New York City’s vaccine mandates are unaffected by the court ruling. AP Photo/Mary Altaffer

Courtesy of Debbie Kaminer, Baruch College, CUNY

The U.S. Supreme Court on Jan. 13, 2022, blocke...



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Digital Currencies

The metaverse is money and crypto is king - why you'll be on a blockchain when you're hopping

 

The metaverse is money and crypto is king – why you’ll be on a blockchain when you’re virtual-world hopping

In the metaverse, your avatar, the clothes it wears and the things it carries belong to you thanks to blockchain. Duncan Rawlinson - Duncan.co/Flickr, CC BY-NC

Courtesy of Rabindra Ratan, Michigan State University and Dar Meshi, Michigan State University ...



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Kimble Charting Solutions

Inflation About To Blast Off or Is The Peak In Play?

Courtesy of Chris Kimble

Current data suggests that inflation has been in our everyday lives for several months. And today’s Producer Price Index data was pretty ugly.

BUT… could inflation be peaking?

Today’s chart 2-pack offers a glimpse of why inflation could subside over the near-term.

Here we look at the “monthly” chart of the US Dollar and Euro currencies. It’s pretty easy to see the rising trend channel for the US Dollar and falling trend channel for the Euro. As well, both currencies have formed a wedge pattern, with the US Dollar testing resistance and the Euro testing support.

Shou...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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