The stock market games seen with the eye of Fibonacci ratios from an old hippie.
Of course, none of this is a recommendation to invest, it is presented as the musings of an old hippie, with nothing better to do. When I wrote this I was having flashbacks to another time; if you’re old enough you’ll recognize them, but they were not about the stock market games.
It never ceases to amaze me how the trading values of stocks unfold over a given period of time, and how they give away their secrets at the beginning of that period of time, the biggest secret being just how far this puppy will run. It’s the stock trading game and I will tell you about it, read on Mcduff.
Below is a daily chart of the hewey index showing the channel that it has established of late.
Below is a weekly chart of the hewey index showing that resistance has turned to support and the breakout above the lower trend line is on. 
I say the spring rally has begun. You see the Bollinger Bands, (the band of light blue bounding the trading range) the moving averages and the SAR resistance levels, and you see the daily candlesticks telling you the open, high, low and close of trading that day. Candlesticks have been used by rice traders for centuries, and tell you about supply and demand for that trading session.
Below are indicators supporting the entry point for the spring rally.
Up to now it has all been background to establish the spring rally is on.
Now for the main event, in the blue corner, “Fibonacci” and in the red corner “Time”.
I am going to try and present this idea of what I see in the charts below, where I have used two colors (green and blue) for two fibonacci studies overlayed to illustrate over two time periods. Bear with me. First we can only see this with hind sight, but it does have potential to extrapolate into the future, with some assumptions, but that is not the subject of this discussion. Here’s that view in two colors and as always these charts are courtesy of stockcharts.com: 
Let’s talk about the green study, and assume we are only at mid October 2010, and the $HUI, the gold bug index, has only run up to 536.88 (point “B”) from 419.65 at the green arrow point “A”. The Time interval is roughly 5 months June to November. Look at the 5 green fibonacci lines, from “A” to “B” are the 100% and 0% retracment lines, which is the extent of the move, (a 100% retracement means we have come back to the starting value and a 0% retracement means we have not lost any value). In the middle of this are three lines at 38.2%, 50% and 61.8% and these are the fibonacci retracements, which means this is how far the market will pullback to (in percent of the total move) and find support, but as you can see they also act as resistance on the way up.
These resistance levels on the way up is the part that blows me away, the final extent of the move is not known at this point, (or is it) why would it stop here, but it does. It stops at one of these three levels, and bounces among these levels for many trading sessions before moving on.
Chong might’ve said “that’s heavy man”.
The sad part is that back then none of us knew this stuff.
Here’s the premise of my observation. If the full extent of the green study move doesn’t unfold until mid October 2010, then how does it know at the start of june 2010 that 465 is going to be the 61.8% level for the entire move, a resistance level that comes into play many times throughout the next two months, and during that two months the other two levels 50% and 38.2% above it will be established, the last of which or higher level (38.2%) around 495. This level becomes important until late February 2011.
You see this isn’t an anomalous event, it happens over and over with stock trading game or more precisely, fibonacci studies.
Had to slide in a little SEO crap, my keyword, sorry. Oh, what the hell, here’s some of my keywords, “stock trading game”, “stock market games”, and “stock market simulation”. Now back to our tale of woe…Oh, and “elementary math games”.
Now let’s look at the same $HUI index (nickname “the hewey”) but we will extend the time interval out to today, February 2011. This is the study color coded in blue lines. The hewey is actually an index of about 10 of the top gold and silver mining companies in the world, its a big deal. The lines are: 100% is 419 at point “A” in late May 2010 and 0% is 590 at point “C” in early Dec 2010. The level 61.8% of that move had already been established as resistance by the 28 of Jun 2010 and was resistance again at Sept 2010 and turned to support at end of Sept and support again in late October 2010 and finally support in Jan 2011.
The 50% line has been resistance and support as well on the way up and down. The level at 38.2% currently the predominant resistance and support area we are now involved with.
To think that this was in the cards since around July of 2010, and as time goes on, other levels will show themselves, and doesn’t that get you to thinking, this could be handy information, to know the extent of future moves in the stock market.
That is “Outa sight man”. It’s what people have said to themselves forever, “If I only knew what the market would do in the future.” Well now you sorta know too.
“Now you’re trippin”.
May you always be groovin’, Over and out.
There has been a change to margin requirements for the commodities this index’s stocks are based on; the banksters are running scared. They did this in 1980 when the metals went nuts, but that will have to be for another post. It may back off temporarily because of this, at least that’s what the banksters want.
