"All human activities have three distinctive features: pattern, time and ratio - all of which observe the Fibonacci Summation Series" (R.N. Elliott - "Nature's Law - the Secret of the Universe" - 1946)

Tuesday, September 18, 2012

SPX - Focus on Fibonacci to confirm a complex corrective count.

The count begins to be difficult and analysis of price and time with the Fibonacci ratios becomes very useful.
I keep thinking that the wave began on June 4 is corrective because there are too many "overlapping swings" and no evidence of harmonious and balanced impulse.
The problem is to correctly identify the pivotal point for each complex corrective pattern, locate the right position of the waves, and the right degree (however, this last point for me is always a secondary trouble because the original implications about the trend are the same).
According to Fibonacci price analisys, an important pivotal point seems to be the bottom of 2 August, as the three waves: first up w (a-b-c from August 2 to August 21), second down x (triangle from 21 August to 4 or 5 September) three up y (a-b-c from 4 or 5 September to 14 September), are in Fibonacci relationships : x = 0.382 * w , plus y is close to [(1 * w) + x ] and meet the guideline of "the right look".
That is why I updated my preferred count, which remains, however, a complex Zig-Zag pattern type wzy or wxyxz.
Instead, regarding the Fibonacci time analisys, I see that the first wave w of minor degree has the same duration of the second wave x (time w = time x) and that the first wave w of the current wave y is equal to w and to x (time w = time x = time w) and this is either a coincidence (but I don't bilieve that), or the current wave y is an elongated complex pattern, or my preferred count is wrong.
I continue to investigate.
I don't think that the bearish correction is completed, and in any case, it's a risky point to open a trade.
Have a great trading day...with care!


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