Fibonacci Unhinged

Fibonacci Retracements have proved meaningless in this market, as the Dow has plowed through the 50% and 61.8% support levels over the last week.  The Dow currently appears to be headed to the 76.4% level of 8,859 on the Dow.  These retracement levels represent the percentage gains of the 10/02-10/07 bull market that have now been given up.  After the 76.4% level, the next stop will be a full 100% retracement of all the gains the market made since the 10/02 bottom.

Comments

[chad]

Perhaps that is because the markets are retracing something larger than the the move up from 2002.

[chad]

And on that note (above) it would be very interesting to see some fibs based on longer timeframes.

[noah]

I dunno I'd have pulled from the swing low where the up move began. From there price has followed the 38 and 50% retracements perfectly, they also line up with previous resistance becoming support.

http://dl-client.getdropbox.com/u/1914/fibs.gif

[nickgogerty]

Fibonacci retracements are just as valuable as they have always been, they make beautiful patterns and can serve as decorative art.t-shirts anyone?

[MSG]

Looks like we're already there and then some. Glad I went 100% money market and bonds a year ago.

These are risky times. It's all about capital preservation.

[p]

'unhinged' then yet u indicate they are headed for a fib level? mixed message

of course classic fundamental metrics have predicted this market move perfectly - not.

[Jody Wilson]

I have yet to see any evidence that Fibonacci grids actually ever work.

[p]

it's just stuff on sale zones- when u shop and see 30% off are u more inclined to buy than if full price - they are just zones of interest based on proportions that are repetitive in nature and human life- people that put full faith in them are fools

[WeeklyTA]

A lot of the Fibs are actually simple support and resistance lines people can draw with a pencil. No need to get all technical..

[Carl]

October 2007 high

0% $14,240.4823.6% $11,115.7338.2% $9,182.6250% $7,620.2461.8% $6,057.8676.4% $4,124.75100% $1,000.00

1960-1970's resistanceturned support in the 1980's