Friday, June 18, 2010

Happy Phi Day!!!


It's June 18th(written as 6-18) - Happy Friday & a Happy Phi Day folks! From time to time, i use this number and its derivatives in my chart analysis. One of the mysterious constants of this universe, and a must-know entity for any technical analyst worth his/her salt! It's a great time to review its amazing properties. Here's an excerpt from Elliott Wave International:

"Phi (pronounced 'fie') is the Greek letter that represents the golden number, which is 1.618034... The reciprocal of this number is 0.618034… or, by rounding down, 0.618, which in month and day notation equates to June 18.

Phi is an irrational number like pi, but its impact goes well beyond pi’s, which essentially delineates the static relationship between the circumference and the diameter of a circle.

Phi, on the other hand, governs patterns of growth and decay, from botany to financial markets; in naturally occurring structures, such as DNA; and in manmade creations in art and architecture, such as the ancient Greek temples. It even identifies where your navel appears in your body (approximately 0.618 of the distance from your feet to the top of your head.).

This ratio has gone by many names, such as the golden ratio, the divine proportion and the golden mean. It wasn't until early in the 20th century that we began using the Greek letter phi to describe it — thanks to American mathematician Mark Barr. He took phi from the initial letter of the name of the Greek sculptor, Phidias, who appears to have used the golden ratio when designing both the Parthenon and its great statue of Athena on the Acropolis in Athens".......Read more

Wednesday, June 16, 2010

S&P500 short-term: Range breakout

Last post on the S&P500 called for a leg up towards 1140-1150. With the surge from the last session, prices broke above the 1100 range. Overbought in the very short-term, price needs to consolidate above 1090-1100 area to launch higher. Here's the hourly chart:



Refer to last post for the daily chart, and path projection. A sustained break above 1100 will meet resistance in the 1140-1150 region, and possibly target upto 1170, depending on the strength of the move. That should setup the right shoulder.

On the other hand, an immediate reversal & breakdown below 1090, will probably lead to a retest of 1040.