SPY Pattern Analysis - The Magic Ratio 1.865, Plus or Minus .01
"My problem is that I have been persecuted by a (ratio). For the last few months this (ratio) has followed me around, has intruded in my most private data, and has assaulted me from the pages of our most public journals. This (ratio) assumes a variety of disguises, being sometimes a little larger and sometimes a little smaller than usual, but never changing so much as to be unrecognizable. The persistence with which this (ratio) plagues me is far more than a random accident. There is, to quote a famous senator, a design behind it, some pattern governing its appearances. Either there really is something unusual about the (ratio) or else I am suffering from delusions of persecution."
Dry humor aside - in comparing various inflection points and critical resistance boundaries of the SPY during the 2008-2009 recession and today's 2018-2019 "correction", I've identified one particular ratio that haunts my analysis. To be precise, 1.865 +/- .01 has appeared, without fail, at seemingly each and every corner - at every major toss and turn - of the present market. By simply dividing the daily lows or highs of the matched "reference points", such as 22 Jan 2008 and 26 Dec 2018, a ratio could be found - in this instance, ~1.8552381. When applied to the reference points shown in the chart above, we end up with a list of similar numbers:
293.94 157.52 ~1.8660487
280.40 149.68 ~1.8733298
233.76 126.00 ~1.8552381
260.70 139.61 ~1.8673447
Very interesting, isn't it? A tad off our usual fib 1.618, but nothing too difficult to work with.
By averaging the four reference points we have gathered, we can then determine a "working estimate" of ~1.8654903.
Apply this ratio to the next potential turning point in the market - for example, a local bottom at 131.73 on 07 Feb 2008 - and voila: a target estimate of ~245.74.
A range could be estimated as well, using 1.865 +/- .01 as the upper and lower boundaries. For the same example, the estimate target range would be 244.42~247.06, presenting a gap of 2.64.
Will this work to pinpoint exact dates or price targets? Probably not. Is this a potential fractal of human nature? Possibly. Either way, it presents itself as something potentially significant.
I recommend you to trade like you drive - safe and steady in a Benz or wild and out in a convertible roadster. Regardless, the wheel is in your hands, not mine.
Dry humor aside - in comparing various inflection points and critical resistance boundaries of the SPY during the 2008-2009 recession and today's 2018-2019 "correction", I've identified one particular ratio that haunts my analysis. To be precise, 1.865 +/- .01 has appeared, without fail, at seemingly each and every corner - at every major toss and turn - of the present market. By simply dividing the daily lows or highs of the matched "reference points", such as 22 Jan 2008 and 26 Dec 2018, a ratio could be found - in this instance, ~1.8552381. When applied to the reference points shown in the chart above, we end up with a list of similar numbers:
293.94 157.52 ~1.8660487
280.40 149.68 ~1.8733298
233.76 126.00 ~1.8552381
260.70 139.61 ~1.8673447
Very interesting, isn't it? A tad off our usual fib 1.618, but nothing too difficult to work with.
By averaging the four reference points we have gathered, we can then determine a "working estimate" of ~1.8654903.
Apply this ratio to the next potential turning point in the market - for example, a local bottom at 131.73 on 07 Feb 2008 - and voila: a target estimate of ~245.74.
A range could be estimated as well, using 1.865 +/- .01 as the upper and lower boundaries. For the same example, the estimate target range would be 244.42~247.06, presenting a gap of 2.64.
Will this work to pinpoint exact dates or price targets? Probably not. Is this a potential fractal of human nature? Possibly. Either way, it presents itself as something potentially significant.
I recommend you to trade like you drive - safe and steady in a Benz or wild and out in a convertible roadster. Regardless, the wheel is in your hands, not mine.
Comment:
We hit and momentarily broke the top end of our ratio, and saw swift pressure downwards. This should extend and begin our new impulse wave. Goodluck to all!