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<span style='font-size:
12.0pt'>I have attempted since7-17 to bring some real time validity to
Fibonacci ratio analysis. I believe I have made some pretty good calls on the
last three turns in the S&P cash index. I know I have profited well from
these calls so far.
<span style='font-size:
12.0pt'>
<span style='font-size:
12.0pt'>Under the thread subject line of "Prognosticators
Anonymous" I made the following calls. First on 7-17 I wrote:
<span style='font-size:
12.0pt'>
<span
style='font-size:12.0pt;color:blue'>"<font size=2
color=blue face=Arial><span style='font-size:10.0pt;font-family:Arial;
color:blue'>The bounce that I was expecting I believe was completed today, and
of course the bounce came from the 7-15 low and not the 7-11 low like I had
expected. This bounce terminated today at 926.55, which is almost an exact 50%
retracement of the move down from the close on 7-8 to the low on
7-15."
<span style='font-size:
10.0pt;font-family:Arial;color:blue'>
<span style='font-size:
10.0pt;font-family:Arial;color:black'>This did prove to be the high of this
brief counter trend move. I then on 7-21 made this forecast.
<span style='font-size:
10.0pt;font-family:Arial;color:black'>
<span style='font-size:
10.0pt;font-family:Arial;color:blue'>"As far as my forecast of 759-782 by
8-15 or 8-16 I stand by that forecast with one modification, due to the fear
that I see beginning to be manifest in the market I think this level could be
seen by an earlier date specifically 7-25 or 7-26. And the 780 level looks to
be the stronger candidate. Here is the case for 780."
<span style='font-size:
10.0pt;font-family:Arial;color:black'>
<span style='font-size:
10.0pt;font-family:Arial;color:black'>I then gave three Fibonacci extensions of
prior moves which all pointed to a tight cluster of targets from 779.79 -
781.91. The market then proceeded to bottom at 775.96 just over 4 points below
my forecast and one day early. My next forecast came on 7-24 when I wrote:
<span style='font-size:
10.0pt;font-family:Arial;color:black'>
<span
style='font-size:10.0pt;mso-bidi-font-size:12.0pt;color:blue'>"My next
targets for the end of this brief rally are:
<span
style='font-size:10.0pt;mso-bidi-font-size:12.0pt;color:blue'>First target
896-902 level which corresponds to a .382 retracement of the move down from the
5-17 high to today's low which works out to be 902. If this target range
is reached it will likely be done by Friday or Monday."
<span
style='font-size:10.0pt;mso-bidi-font-size:12.0pt'>
<font size=2 color=black
face=Arial>While
the market did reach this level by the following Monday by closing at 898.96,
by Wednesday I forced to abandon this price level as a valid turning point
level because the market had reached a high of 911.63. I then made the
following forecast that Wednesday night 7-31.
<font size=2 color=black
face=Arial>
<span
style='font-size:12.0pt;color:blue'>"I have two high probability targets
now that before had to be considered very low probability targets. They are,
first the 912-917 range this corresponds to a .618 retracement of the move from
6-28 down to 7-24. We are right now on the edge of this range with today's high
of 911.64 (close enough for me). From here we could easily open down tomorrow
possibly down big from this level or drift slightly higher into the range
before turning lower and completing the turn high."
<span
style='font-size:12.0pt;color:blue'>
<span
style='font-size:12.0pt;color:black'>I believe Friday's market action has
confirmed that 911.64 was the high for the most recent turning point. We are
now likely to re-test the recent lows at the very least.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>The entire point of this post is hopefully
to prove that Fibonacci ratio analysis is a valuable tool that can be combined
with other tools to make money in the market. I have made ratio analysis one of
my major tools that I use in all my analysis with similar results to the ones I
have documented in this post.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>I understand that there are some on this
list that have debunked Fibonacci ratio analysis here in the past pointing out
that posters have just picked a few examples in hindsight, and that it only
proves that they are good with charts.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>I have put it on the line in real time to
prove my point. My reasons are simple it is a valuable tool that new traders
should consider adding to their arsenal. I did not want to see the newer
traders discouraged from using this tool by those that do not see its value.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>Can you program a profitable system using
just ratio analysis? I doubt it. Can you use ratio analysis to assist you in
extracting profits from the markets? Absolutely! I have over the past two
weeks.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>All price movements in the market are
related to some previous move in price. Very often this relationship is a
Fibonacci ratio.
<span
style='font-size:12.0pt;color:black'>
<span
style='font-size:12.0pt;color:black'>E
<span style='font-size:10.0pt;
font-family:Arial'>
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