TECHNICAL ANALYSIS

Gold Chart

[VIDEO] Gold and Silver Mining Stocks Price Update

In the video below, I cover price action in some key mining stocks as well as the gold:silver ratio and the S&P:gold ratio. If gold is going to make another push to $1560-$1580, we want to see miners lead the way. Thus far, they are showing strength, which is a positive sign for bulls.
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US Real Estate Prices

Is Real Estate Getting Cheaper?

In the chart above, I analyze mortgage payments as a function of interest rates and loan size. Much has been written about the increases in home price over the past two decades, as the average home in America has nearly doubled (+88%) from $165,000 to $311,000 (orange line).
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Long term S&P 500

S&P500 to 4500+?

The month of November was a significant expression of bullishness in the markets, as the S&P500 knifed through the 261.8% Fibonacci extension with a strong monthly candle close to new all-time highs. Taking a longer term view, the technical tailwind appears to be supporting a run to 4500+ to the 461.8% extension – nearly 50%...
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Golden Spiral

Happy Fibonacci Day! 11/23

Today, November 23rd (11/23), is international Fibonacci Day. It is a day to recognize the beauty and wonder of mathematics in nature, biology, art, music, trading, and many other aspects of our lives. The world is filled with incredible complexity and order, and it governed by the rules of math. The fibonacci sequence, the golden...
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Bitcoin Chart

[VIDEO] Bitcoin Price – This is the Only Chart that Matters

In this video, I analyze the Bitcoin chart. Opinions on bitcoin tend to be very polarized. In this video I try to take a balanced view and simply look at the long term chart and where price is trending. I overlay this chart with Fibonacci and Elliott Wave analysis to arrive at the conclusion that...
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S&P500

[VIDEO] S&P500 Chart Update, Nov 19, 2019

In this video, I analyze the S&P500 chart, which is now meeting up with 20-year long term resistance and the upper bound of its year long channel, but is also breaking out above the 261.8% Fibonacci extension from the 2007 peak to the 2009 bottom in equities.
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SP500 Fibonacci

Fibonacci Retracements

The use of Fibonacci levels in trading is based on the principle that the ratios of the Fibonacci sequence tend to coincide with key support and resistance zones, often signaling key pivot areas of price movement. 

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SP500 Fibonacci

FIBONACCI EXTENSIONS

While Fibonacci retracements examine price action following a breakdown from the pivot cycle highs, Fibonacci extensions establish target levels following a breakout from pivot cycle highs.

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Fibonacci Time Zones

FIBONACCI TIME ZONES & RATIOS

A similar tool, Fibonacci Time Ratios, applies the same technique across the x-axis to measure activity across time, but instead of producing bands related to a fixed period, a Fibonacci Time Ratio produces vertical bands corresponding to Fibonacci Ratios.

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Rising Fibonacci Fan

FIBONACCI FANS & ARCS

While Fibonacci retracements and extensions measure changes in price (y-axis, horizontal bands), and Fibonacci time zones and ratios measure changes in time (x-axis, vertical bands), Fibonacci fans measure changes in both time and price.

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What is Fibonacci?

Fibonacci refers to the sequence of numbers made famous by thirteenth-century mathematician Leonardo Pisano, who presented and explained the solution to an algebraic math problem in his book Liber Abaci (1228). The Fibonacci sequence and the ratios of its sequential numbers have been discovered to be pervasive throughout nature, art, music, biology, and other disciplines, and they form the foundation for Fibonacci trading tools. Traders apply these Fibonacci levels to help interpret market behavior and to isolate higher probability setups and market pivots.

The sequence begins with 0 and 1 and is comprised of subsequent numbers in which the nth number is the sum of the two previous numbers. The equation for finding a Fibonacci number can be written like this:

Fn = F(n-1) + F(n-2). The starting points are F1 = 1 and F2 = 1.

Each number in the Fibonacci sequence is identified with a subscript 1, 2, 3, 4 …… to indicate which term of the sequence we are talking about. Thus F16 refers to the sixteenth Fibonacci number.

The Fibonacci Sequence

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, 6765, 10946, 17711, 28657, 46368, 75025, 121393, 196418, 317811 . . .

What is the Golden Ratio?

Related to the Fibonacci sequence is another famous mathematical term: the Golden Ratio. When a number in the Fibonacci series is divided by the number preceding it, the quotients themselves become a series that follows a fascinating pattern: 1/1 = 1,   2/1 = 2,   3/2 = 1.5,   5/3 = 1.666…,   8/5 = 1.6,   13/8 = 1.625,   21/13 = 1.61538,   34/21 = 1.619,   55/34 = 1.6176…, and   89/55 = 1.618… The first ten ratios approach the numerical value 1.618034… which is called the “Golden Ratio” or the “Golden Number,” represented by the Greek letter Phi (Φ, φ). After these first ten ratios, the quotients draw ever closer to Phi and appear to converge upon it, but never quite reach it because it is an irrational number. Phi (Φ), 1.61803 39887…, is also the number derived when you divide a line in mean and extreme ratio, then divide the whole line by the largest mean section; its inverse is phi (φ), 0.61803 39887…, obtained when dividing the extreme (smaller) portion of a line by the (larger) mean. In the image below, the ratio of the smaller part of a line (CB), to the larger part (AC) – i.e. CB/AC – is the same as the ratio of the larger part, AC, to the whole line AB. Therefore, CB/AC = AC/AB. Golden Section

Phi and phi are also known as the Golden Number and the Golden Section. The formula for Golden Ratio is: F(n) = (x^n – (1-x)^n)/(x – (1-x)) where x = (1+sqrt 5)/2 ~ 1.618 The Golden Ratio represents a fundamental mathematical structure which appears prevalent – some say ubiquitous – throughout nature, and is used as the basis for Fibonacci tools in trading.

Download Your Free eBook Now!

Master Fibonacci: The Man Who Changed Math

Did you know you can download a FREE copy of Master Fibonacci with a free membership on Fibonacci.com?

Paperback: 128 pages
Author: Shelley Allen, M.A.Ed.
Publisher: Fibonacci Inc.; 1st edition (2019)
Language: English