Friday, April 23, 2010


I apologize for the bottom chart below. There was a mis-label but I have since corrected that with the top chart above. In fact, I added a few more labels, comments and markings. I also renamed the title.

I forgot to mention that the reverse technique is new to me. However, I have used the Fib extension technique frequently.  The two Fibonacci techniques are very interesting.

Notice that on the top chart, I added a second reverse Fib technique near the top of the structure. I find it very interesting that wave b-C is currently at 161.8% of the previous swing wave a-b. Additionally there is a heavy confluence with the other reverse technique using wave A-B at 200% in addition with the 62.8% retracement of the entire bear decline to date.

What is also interesting to note are the various support and resistance levels (arrows point the way) provided by the various Fib levels. I find this whole Fibonacci concept so intriguing (obviously along with EW).

So assuming we hit a top today, I have attempted to identify some potential levels if we begin to pullback the first thing next week. The bottom chart highlights the Fib levels.

Once again, the Fib levels have an uncanny way of highlighting the support and resistance levels. Notice where 200% takes you?

Does all this mean anything? No guarantees but certainly something to be mindful of. This may help spot the pivot points.  If we have topped for now, I will be very interested in seeing where it finds support.


The SPX is coming upon a level of numerous significance

1. The "Lehman" Level
2. 62% Fib retracement (1228) of the entire bear market decline
3. Long term (20 years) resistance levels at approx 1230-1235

The top chart highlights the long term resistance level and trendlines.

The second chart is just a play on a reverse Fibonacci technique illustrated by Jeffrey Kennedy of Elliott Wave International.  I posted on this technique here. When projecting price targets with this technique, Kennedy likes to use the 1.382 and 2.00 multiples of previous swings to project for the following wave. In our example, price has achieved the 2.00 multiple of the previous swing. E.g. Wave (B-C) = 2.00*wave (A-B).

The chart also highlights a Fibonacci relationship between waves that may bear some significance due the confluence at today's level. In this example, wave (B-C) = ~ 261.8*wave (O-A)

*Note, I realized I labeled the ratio as 1.618 vs 2.618 on the chart. I'll have that corrected when I get a chance. 

Does this mean the market cannot go higher? Certainly not. It just may imply that we may see a break in this historic rise since March 2009.


  1. Nice work Grand. I've read Constance's book. Interesting. Nice work on applying the fibs.


  2. excellent Fibonacci technique and calculations! Thanks. it says it's done here.

    if it could meet your short term counting (which says somewhat much higher), would be great.

    i observe the same view as your Finacci analysis, but from different angles.

  3. Thx for the comments Crush and Humble. Let's see what happens. Watch those MAs though ;)