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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.
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Perhaps that is because the markets are retracing something larger than the the move up from 2002.
Posted by: chad | October 09, 2008 at 01:35 PM
And on that note (above) it would be very interesting to see some fibs based on longer timeframes.
Posted by: chad | October 09, 2008 at 01:36 PM
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
Posted by: noah | October 09, 2008 at 01:46 PM
Fibonacci retracements are just as valuable as they have always been, they make beautiful patterns and can serve as decorative art.t-shirts anyone?
Posted by: nickgogerty | October 09, 2008 at 04:16 PM
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.
Posted by: MSG | October 09, 2008 at 04:20 PM
'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.
Posted by: p | October 09, 2008 at 04:50 PM
I have yet to see any evidence that Fibonacci grids actually ever work.
Posted by: Jody Wilson | October 09, 2008 at 10:15 PM
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
Posted by: p | October 10, 2008 at 08:11 AM
A lot of the Fibs are actually simple support and resistance lines people can draw with a pencil. No need to get all technical..
Posted by: WeeklyTA | October 26, 2008 at 12:03 AM
October 2007 high
0% $14,240.48
23.6% $11,115.73
38.2% $9,182.62
50% $7,620.24
61.8% $6,057.86
76.4% $4,124.75
100% $1,000.00
1960-1970's resistance
turned support in the 1980's
Posted by: Carl | October 26, 2008 at 11:15 PM