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Hello wavemechanic, Clyde and others,
regarding CLyde's analysis---clever way of finding if there is
anything going on. and I do believe if Fibs are repeating patterns,
there should be some blips in the distribution of swing %'s.
For clyde, when I opened the chart I expected to find a frequency
distribution. I couldn't tell what it was you actually posted. in a
freq deistr I would expect a multi-modal disribution with humps at 38,
50, 62 especiallly.
for the others, If Mandelbrot's assessment of fractal structure of
marekts is correct, it shouldn't matter which granularity (i.e. swing
strength in this case) one chooses. the fractal structure should be
the same and the fib effects would be present.
--
Best regards,
Jim Johnson mailto:jejohn@xxxxxxxxxxxxxxxx
Saturday, April 13, 2002, 8:03:19 PM, you wrote:
w> Clyde:
w> I think you have oversimplified a fairly complex problem. The goal is to identify the major turns within perhaps +/- 1-2%, as in the case of similar studies (e.g., pitchforks, So9, etc.). In
w> order to do this, traders usually use more than just fibo levels to make a judgement as to what the significant level is. They look for meshing between major fibo levels and other
w> subjective/objective factors (e.g., EW, indicators, etc.). Take a look at the attached. Would your analysis pick up the major turns on this MSFT daily, rejecting the minor swings within each
w> leg? That is the primary goal. My guess is that you will have to use different pivot parameters to catch major and minor turns. I also suspect that consistent results will be very difficult to
w> achieve using pivots alone. I do know, however, that more often than not the major turns are in synch with the "standard" fib, So9, etc. levels. In addition, there appears to be reasonable
w> evidence that the patterns are fractal, extending up/down in time. Of course, to see that one has to change the "microscope's magnification" by, for example, adjusting pivot "+/-" size, indicator
w> settings, etc., as a one size fits all would most probably not be suitable in the majority of cases.
w> Bill
w> ----- Original Message -----
w> From: Clyde Lee
w> To: realtraders@xxxxxxxxxxxxxxx
w> Sent: Saturday, April 13, 2002 4:13 PM
w> Subject: Re: Re[6]: [RT] Fibo predictions
w> What does it take to prove that Fib numbers have no validity in
w> estimating where prices might make a turn.
w> I have posted several charts which clearly prove this is the
w> case and yet we continue to hear BS about Fib numbers.
w> Just to make it clear, here is an explanation of the method
w> behind the attached chart.
w> Consider a swing such as the following"
w> b
w> / \
w> / \
w> / \
w> a \
w> \
w> c
w> and calculate the ratio (b-a)/(b-c)
w> or a swing of the following type
w> a
w> \
w> \
w> \ c
w> \ /
w> \ /
w> b
w> and calculate the ratio (a-b)/(c-b)
w> Do this with a mathematically definable method
w> of picking swings and accumulate the ratios in
w> a spread sheet, sort the data by ratio, and make
w> a chart.
w> The attached is exactly that chart for the S&P
w> index from 1930 until now using an 8 bar length
w> window for picking pivots.
w> A careful examination will indicate a more or less
w> CONTINUIOUS distribution of ratios of the 1713 swings
w> which existed in the period of study and had a ratio
w> of less than 2.0.
w> If there were ANY VALIDITY to the concept of turning
w> of prices at FIB levels then there would be a bunching
w> of data about the various FIB levels and not the very
w> continuous distribution that is found in the data.
w> Again, people may use the fib levels as levels at
w> which to be aware of potential turns in direction of
w> prices but the analysis says that we are just as well
w> off with a random set of lines since there will not
w> be any grouping around them either.
w> Please, examine these data in detail and if I am
w> missing something then provide the data or interpretation
w> of these data that says otherwise.
w> Clyde
w> - - - - - - - - - - - - - - - - - - - - - - - - - - - -
w> Clyde Lee Chairman/CEO (Home of SwingMachine)
w> SYTECH Corporation email: clydelee@xxxxxxxxxxxx
w> 7910 Westglen, Suite 105 Office: (713) 783-9540
w> Houston, TX 77063 Fax: (713) 783-1092
w> Details at: www.theswingmachine.com
w> - - - - - - - - - - - - - - - - - - - - - - - - - - - -
w> ----- Original Message -----
w> From: ztrader
w> To: realtraders@xxxxxxxxxxxxxxx
w> Sent: Saturday, April 13, 2002 1:37 PM
w> Subject: Re[6]: [RT] Fibo predictions
w> On Saturday, April 13, 2002, 11:10:12 AM, wavemechanic wrote:
w> w> Are you thinking that confluence is associated with Fibs only?
w> w> Could it be extended to any coincidence of indicators?
w> w> As long as the indicators are truely different (e.g., velocity vs acceleration, etc.).
w> How about a 50 ma and a 200 ma with identical values, and price is
w> approaching this value? Would this 'confluence' have more importance
w> than if the two ma's had quite different values?
w> ztrader
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