S&P

The importance of Fibo 0.618, TSX, Dax, S&P.

Hamilton

One should never underestimate the value of Fibo ratios in this business or, for that matter any other (Google the fellow from Pisa and you will be amazed at all the mathematical properties of this “golden “ ratio.  Any way to try this out once again I have taken the 5 year charts of the TSX, the Dax, and the S&P. Here they are (click on them to enlarge).

tsx may 19 2010 DAX May 19 2010

S&P May 19 2010

For all three I have taken the high, the low and taken 61.8% of the difference and added that back to the low.  For the TSX the high was 14969, the low 7591 and the difference 7378.^61.8%of that is 4559 added back to the low gives 12150.

For the DAX the numbers are 8092, 3666, 2735 which yields 6401

And for the S&P 1557, 683,874,540 and 1223.

Please note that these numbers do not correspond precisely with the actual highs or lows as these may not reflect the intraday trades or may suffer from other, minor deficiencies. The point here is that all three came within 1/10%-2.5% of these targets. For the TSX the target of 12150 was slightly exceeded as the high was 12280 (off by about 1%), the Dax with a target of 6401 hit 6249 or short by about 2 %, and the S&P with a target of 1223 made 1217 off by only a miniscule amount. Just for the record, these targets were calculated a very long time ago! the main frustration was the time it took to get there.

    So what do the TSX, Dax and S&P have in common? Precious little except that in bear markets the correlations between asset classes tend to approach 1, and the more the world globalizes and we all read the same stuff, the faster this is happening.

DJI , TSE ,S&P update

Hamilton

dji may 9 2010

Our idea of a triangle wave 4 in the DJIA was obviously incorrect, however the idea of a 4th wave may still be correct. Alternatively, a faied 5th wave could be supposed in both the DJ and the S&P but is a bit of a stretch in the TSE (evenso that would not improve the situation by a whole lot as that would make wave 4, wave 2 correcting the entire down move.) In both cases look for overlap to negate this outlook. So far we retraced about 62% so if it does not get better soon it may get a lot worse.

TSE , DAX and S&P

Hamilton

Today the TSE traded at or above the 12135 level consistently for the first time. This is the level that we mentioned, now more than a year ago, as a very good possibility for a retracement.  I myself did not have the patience to wait this long, expecting the whole thing to take about half as much time as it has, so it is not clearly something that one could have traded to the fullest, after all after 50% who really knows. Now that we are here probabilities are turning to the negative, which is not to say that the market cannot go (a lot?) higher, but that the likelihood of that happening is very low.

Further more its is interesting to note that not just the TSE but also the DAX and the S&P are, roughly speaking, at the very same spot right at this time. We are talking indexes, not individual stocks so some discretion is required but the conclusion should be to sell just about everything!

TSE April1 2010 DAX April1 2010

 S&P April1 2010

Remember, you can enlarge these charts by clicking on them and you can then put them side by side if you wish.

S&P Feb 2010.

Hamilton

This time I will use the S&P, not to create confusion but simple because it has the clearest pattern but they are essentially all the same for the Dow, the TSE and many others. Here it is;

S&P Feb 2010

The S&P is actually running behind the others in that it has retraced less but the message is the same. This up leg (for a good part due to the EEC doing nothing YET for Greece) has the potential to go a little higher using 3 different measures, but need not do so! At the latest the high should occur tomorrow morning perpendicularly above the apex. The level could be as high as 1087.  The next move down, as a 3d wave, should be a little more dramatic than we have had so far. This prediction is rather precise so chances of being wrong are proportionally larger. So be it.