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Are Fibonacci retracements and projections useful?
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Are Fibonacci retracements and projections useful?

  #231 (permalink)
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tigertrader View Post
the streaks on your underwear will work in a trending market...

Reminds me of Al Brooks in his price action trilogy it went something like:

In a uptrending market "If You see a bull bar.. buy it, if You see a bear bar.. buy it, if price crosses, pullback to or is near any MA.. buy it if rained in Amazon sometime last year.. buy it.

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  #232 (permalink)
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bobwest View Post
These kinds of pictures always make me smile, because they suggest that there is some kind of order in the world after all, which is an idea I like.

We have beaten this fib horse pretty well to death in this thread, so I am not offering any criticism or objection. But I do see all those lines, and many, many confluences too, and, while I do like how it worked out, I always wonder how I would really make use of them. Some of them have only a bar's height between them, or less, and look how many get touched. How to distinguish them, is my question.

This is just a comment, not an attempt to continue an argument. I think we got to an acceptable stopping point already, and I'm not fighting you. I do really like this kind of stuff.

My friend @ratfink sometimes calls it art, and I can appreciate that. Thanks for the chart, it is very cool.

Bob.

I'm really not trying to continue the "argument". I'm totally cool with people not going for fibs. And I'm not really trying to prove anything at this point. Just posted what I was seeing using fibs. It's up to the individual to decide if they find them useful. That's why i put a question mark.

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  #233 (permalink)
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srgtroy View Post
Here is one retracement and one projection used together:

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People talk about one line, but its not the individual lines that matter so much as the confluences...

By the way, these lines could have been set in place by October 1st.

why is the green one off? the 100% doesn't match up

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  #234 (permalink)
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Itchymoku View Post
why is the green one off? the 100% doesn't match up

It's hard to see, but they are not exactly the same thing. I will try to make it clearer.

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  #235 (permalink)
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@Itchymoku

Here is each drawn separately:

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  #236 (permalink)
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srgtroy View Post
@Itchymoku

Here is each drawn separately:

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The green one looks strange, very decorative indeed.

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  #237 (permalink)
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Fat Tails View Post
The green one looks strange, very decorative indeed.

lol. Just your basic projection. Maybe I should open a gallery

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  #238 (permalink)
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The Fibonacci ratios are not always respected. So called harmonic ratios are probably fallacies.

Because the pattern looked somehow similar to a Gartley and or a Butterfly pattern, I could not resist and started drawing some lines. The problem here is that the second leg down went further down than predicted by harmonic ratios. The upleg went further up than the 78% specified for a Gartley pattern. So it is not harmonic, maybe it is an enharmonic pattern. Also it is not safe to assume that the recent leg up has already reached its top.

But all this is not really important. What I see on the chart is a trading range to the left. This was followed by a fast drop in price which occurred during 3 days only. After that 3-day drop it took the market about 2 months (August 25 to October 23) and 2 legs to climb back to the opening price of the first day of that 3-day drop.

The bulls are definitely weak if they take that long to recover. And if I look for Gartley pattern I am not measuring harmonic ratios (markets are non-linear do not follow geometry or numerology). I am looking for the essentials.

-> an extended uptrend that becomes weaker and weaker
-> a sudden and fast single leg drop
-> a painful two-legged move up

where painful means that the time it took the market to recover after the drop was much, much longer than the drop.


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But this is the wrong picture. Here is the entire trend:


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The market is overvalued, and the false Gartley pattern shows the weakness of the bulls. No ratios or harmonic stuff needed to find out about it.

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  #239 (permalink)
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Fat Tails View Post

Because the pattern looked somehow similar to a Gartley and or a Butterfly pattern, I could not resist and started drawing some lines...

But this is the wrong picture. Here is the entire trend:


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Don't know enough about Gartley's and Harmonic patterns to comment, but here are some fibs for the above timeframe. The 161.8 extension at 2138 proved to be the first wall that actually stopped the bull train, at least for now. I do find it a little hard to believe that of all the places the bull could have stalled, the fact that it did so right there is a total freak coincidence. I mean of all the ratios, that is the one. Still, doesn't mean that's the top. I'm still keeping an eye on the 161.8 projection level at 2213.50 for an eventual divergent top. Timing unkown. But that's just me

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srgtroy View Post
Don't know enough about Gartley's and Harmonic patterns to comment, but here are some fibs for the above timeframe. The 161.8 extension at 2138 proved to be the first wall that actually stopped the bull train, at least for now. I do find it a little hard to believe that of all the places the bull could have stalled, the fact that it did so right there is a total freak coincidence. I mean of all the ratios, that is the one. Still, doesn't mean that's the top. I'm still keeping an eye on the 161.8 projection level at 2213.50 for an eventual divergent top. Timing unkown. But that's just me

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The reverse expansions of 161.8% are indeed useful. They are high probability exits and good entry points for smaller counter trades. Much better than any of the retracements below the 100% level. But they are not related to any universal harmonic laws. They are mainly working as self-fulfilling prophecy - and because a retracement of 161.8% is a good point for any strong trend to take a break.

Took me quite some time to draw all the fib retracements and expansions below. The two expansions are indeed outstanding.


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