Fibonacci Unhinged

Fibonacci Retracements have proved meaningless in this market, as the Dow has plowed through the 50% and 61.8% support levels over the last week.  The Dow currently appears to be headed to the 76.4% level of 8,859 on the Dow. 

These retracement levels represent the percentage gains of the 10/02-10/07 bull market that have now been given up.  After the 76.4% level, the next stop will be a full 100% retracement of all the gains the market made since the 10/02 bottom.

click to enlarge

Comments

[Sapinho:]

This correction corresponds to a larger degree, you have to go back at least to 1987 to calculate fibo relationships.

2008 Oct 10 06:32 AM

[Mr.G:]

sapinho-is right you have to go farther back-this is the mother of all retracements

2008 Oct 10 08:07 AM

[andyn:]

this is stupid technical analysis... if things were predictable where it would bounce up or down (60%, 30% etc), it looses its very predictability.
Sure, it will turn somewhere and I can come up with my own retracement levels of 25, 50, 75%....I will get it right someday!!!
The key thing to understand is this is a fundamental change in financial markets and if the govt doesnt interfere, the bottom would be found faster and we will stabilize. Step back and take a deep breath.

2008 Oct 10 09:37 AM

[Dave_Hike:]

Try the Fibonacci sequence starting the first day of the ' crash ' , when Lehman bankrupcy was announced : Sept. 15th. It plays out to a tee, only excepting Sept. 29th. : The day the Senate approved the first bailout bill.
If the sequence holds, Tuesday Oct. 14 should be a reversal day. ( 8 down days )

2008 Oct 10 11:16 AM