Re: Fibonacci, why it works.

[Harley Meyer <meyer@xxxxxxxxxxx>]

I was going to respond earlier but have been busy. Email overload.

(Some of you may of heard this from me before.)
I was visiting the CME in Chicago and I was watching the S&P 500 futures
pit. A woman was standing next to me talking to another gentlemen. I
over heard her say that her husband was down in the pit. I was curious
of course so I struck up a conversation with her. She told me about her
husband, etc. One of the most important things she said was the guys
over in the bond pit were a little bit nerdy. (She was making a
reference to her husband and that he was not that into it.) She then
turned in said that they are into Fibonacci numbers. But she guessed
that I already knew that. No I didn't.

The point is that if the guys in the pits are into some form of analysis
it will show up in the charts. I remember someone earlier this year
commenting that the only thing that works in some futures trading is to
use Fibonacci because everyone else uses them. They also went on to say
that some times the institutions will go against the Fibs to screw
things up and because they can.

So it is not that we are all part of nature but instead this a construct
that the masses have chosen to believe to be what works. So the masses
implement this strategy based upon some believe that it works. So if
everyone is doing it you can't go wrong. This is true for Elliot Wave or
any other form of analysis. Just as long as there are enough users of
the technique to effect the market.

I do have a degree in math. Not that this means anything. One thing I
have found is that when other disciplines of study (sociology,
economics, biology, etc.) incorporate math into their models they try to
make to much of their model. I chuckle when my wife, who has a ph.d. in
marketing, starts talking about modeling some event in marketing with
math or statistics. It is about as bad as me going to Mexico and
pretending that I can speak Spanish fluently. ( I can't, just enough to
get by.)

So not to burst anyone's bubble. But, it works only because there are a
large number of traders who use the same techniques. It has nothing to
do with nature.

not fibbing,

Harley