Predicting the stock market using the golden ratio

[Time_Travel]

Can you cite some references for these claims, TT :QuestionM I’ve a suspicion they’re present day myths, so would like to get at their sources to see if my suspicions are justified.

 

You see in May 2010 in Picture Golden Ratio1 if you project 1.618 times from the oct 2010 lows of this Index to may 2010 lows it will give you a target of 6348. The market reached 6342.

 

Also see in Golden Ratio2 Picture how the lows of May 2010 divides the market into a perfect golden fibonacci ratio.

 

I think this is enough evidence as any person who would have trusted this would have almost doubled there capital in a span of 6 months( the 1.618 was touched in Nov 2010).

 

If you still need more evidence i will provide you 100's of charts. Even the Dow Jones Crash of 2008 was predicted using a Fibonacci Golden Ratio in 2006. The crash of 1987 too was predicted using this method.

 

You may ask why choose the may 2010 lows i might choose any. But there are certain rules to follow of finding this typical low and once found the market up move will divide into a perfect Golden Ratio no matter what the news is or whatever happens to the world, it is 99% predictable. It takes a lot of experience to find that typical low.

 

This is a daily chart. I can find 100's of chart daily when markets open in 1,3,5,8,13,15,30,60,120,240 min time frame.(too boring to find them unless i trade them and make money out of them :D ).

[CraigD]

You see in May 2010 in Picture Golden Ratio1 if you project 1.618 times from the oct 2010 lows of this Index to may 2010 lows it will give you a target of 6348. The market reached 6342.

 

Also see in Golden Ratio2 Picture how the lows of May 2010 divides the market into a perfect golden fibonacci ratio.

 

I think this is enough evidence as any person who would have trusted this would have almost doubled there capital in a span of 6 months( the 1.618 was touched in Nov 2010).

All that’s been done with these two images, Time_Travel, is to take the same graph, and relabel the vertical axis [imath]y=\frac{y_0-b}{c}[/imath] (in the first picture) and [imath]y’=\frac{y-b}{ \varphi c}[/imath] (in the second), where [imath]b=2256.98[/imath] (in the first) and [imath]2256.02[/imath] (in the second) and [imath]c=4785.88 -b[/imath].

 

By selecting [imath]b[/imath] and [imath]c[/imath], any pair of [imath]y[/imath] values can be made to have the golden ratio [imath] \varphi[/imath].

 

The relabeling to make the Oct high 1.618 and the May low 1 in the first picture, the high 1, low 0.618, in the second, is simply an example of the identity [imath] \varphi = \frac{1}{ \varphi} +1[/imath].

 

In short, these graphs appear to be evidence of nothing but someone’s ability to do very simple algebra.

 

Are they your original work, TT, or did you get them from a webpage? If the latter, what’s the url of that webpage?

 

:angry: I don’t like this sort of trickery – it preys upon people with inadequate math skills, deceiving rather than educating.

 

Even the Dow Jones Crash of 2008 was predicted using a Fibonacci Golden Ratio in 2006. The crash of 1987 too was predicted using this method.

TT, Are you claiming that someone predicted these crashes to within a few days or weeks, before the crashes actually occurred?

 

Can you provide evidence of this – a credible archive of a webpage, or trustworthy third-party certified dated document? Without such evidence, this is simply an unsupported claim.

 

And what's poppycock specifically? Is it that humans don't have spiral fingerprints?

Usually, no, we don't.

 

Sections of many people’s dermal ridges show vague spiral patterns, conventionally called whorls, but most dermal ridges follow patterns better described as cores, forks, deltas, etc. I’ve never seen a whole finger dominated by a single whorl, however, so think they’re rare, perhaps even unknown.

 

Even whorls are rarely even approximately logarithmic spirals, because dermal ridges intersect radii from selected centers at many very different angles. By definition, this angle of intersection is constant in a logarithmic spiral. In nearly every case I’ve looked at, whorls aren’t mathematically spirals at all, because their ridge lines can be described as polar functions at all, because they fork and double back a lot, leaving domains where no or more than one radius is defined for a given angle.

 

Or is it that the blood does not flow in a circular pattern underneath the skin to make the crown of hair grow into a spiral shape?

No, it doesn't.

 

Although lack of circulation can cause loss of hair follicles, and even necrosis of the skin, the formation of follicles and other skin glands (hair follicles are actually specialized sebaceous (sweat) glands) is determined, as with all other organs, by complicated growth hormone effects (sometimes described as “neighbor” effects, because recurring organs like sebaceous glands influence the placement of similar glands by “talking” to the surrounding tissues with the same hormones that caused them to form), not blood circulation. Even skin maintained and/or grown en vitro, supplied with nutrients and oxygen by growth media rather than blood, form these glands.

 

Or you don't believe my son's chest hair has a galaxy shape just above his heart? (I guess I have to take a picture).

I don’t doubt it – but would still like to see a picture, as it sounds like a cool and unusual feature. :) :thumbs_up

 

However, just because a feature resembles a shape like a hurricane or galaxy doesn’t mean that it’s caused by similar phenomena. I’ve seen clouds that reminded me of many objects, some even of barred spiral galaxies, but this seeming is usually due more to my eye-brain system’s propensity for pattern recognition than a significant mathematical correlation between these objects.

 

Recognizing the bias that’s “hardwired” into us by our perceptual neuro-psyches, and using appropriate objective mathematical analysis to avoid it, is an important skill.

[Time_Travel]

All that’s been done with these two images, Time_Travel, is to take the same graph, and relabel the vertical axis [imath]y=\frac{y_0-b}{c}[/imath] (in the first picture) and [imath]y’=\frac{y-b}{ \varphi c}[/imath] (in the second), where [imath]b=2256.98[/imath] (in the first) and [imath]2256.02[/imath] (in the second) and [imath]c=4785.88 -b[/imath].

 

By selecting [imath]b[/imath] and [imath]c[/imath], any pair of [imath]y[/imath] values can be made to have the golden ratio [imath] \varphi[/imath].

 

The relabeling to make the Oct high 1.618 and the May low 1 in the first picture, the high 1, low 0.618, in the second, is simply an example of the identity [imath] \varphi = \frac{1}{ \varphi} +1[/imath].

 

 

 

 

CraigD, even though the equations you gave to calculate are 100% correct but your interpretation is 100% wrong as you need to know 6348 i.e y0 in advance which was the projected value from may 2010 using 1.618.

I assume your [imath]y_0[/imath] is 6348(actually i am trying to find out [imath]y_0[/imath] not [imath]y[/imath] as i know [imath]y[/imath] is always either 1.618 or 0.618 again there are rules and equations whether to apply 0.618 or 1.618 for [imath]y_0[/imath]).

But on may 2010 how you know in advance the market will reverse at the 6348?

 

Well here is a calculation ::

 

First You have to find the length from 2256 to 4785 i.e your value c= (4785-2256)=2529.

all you have to do when market is at 4785 is to add c* 0.618::

Target = 4785 + 2529 * 0.618 = 6348 (6347.922 to be accurate)

Confused!!!!!!!!!!

 

In your mathematical equations here i have a full explanation::

Here is your equation::

[imath]

y=\frac{y_0-b}{c}

[/imath]

 

where y0 = 6348, b= 2256 , c = 4785 - 2256.

 

In your above equation well in fact it is the y0 i need to find out not y, since i know y = 1.618. Just rewriting your equation i will know in advance as on may 2010 where markets will reverse. Here is your equation rewritten .

 

[imath]

y_0 = y * c + b

[/imath]

 

where y=1.618, c= 4785-2256=2529, b =2256. sub in the above rewritten equation::

 

[imath]y_0 = 1.618 * 2529 + 2256[/imath]

 

Therefore [imath]y_0 = 6348[/imath]

 

As you can see i never needed to know anything except oct 2008 low of 2256 and may 2010 lows of 4785.

 

 

In short, these graphs appear to be evidence of nothing but someone’s ability to do very simple algebra.

 

 

You would have made millions of dollars if you know what this simple algebra can do.

 

 

 

Are they your original work, TT, or did you get them from a webpage? If the latter, what’s the url of that webpage?

 

 

Yes they are my original work.

 

 

 

:angry: I don’t like this sort of trickery – it preys upon people with inadequate math skills, deceiving rather than educating.

 

 

They might be a trickery for some, since your equations parameters needs to be shifted from LHS to RHS and vice versa , but for traders who know this secret predictive power make huge $$$$$$$$$$ :D. They are not deceiving but rather speaking the truth we humans don't want to believe that market is predictive.

 

 

 

By selecting [imath]b[/imath] and [imath]c[/imath], any pair of [imath]y[/imath] values can be made to have the golden ratio [imath] \varphi[/imath].

 

You failed to recognize one important thing, the market turned exactly at 6348 like predicted by fibonacci tool in the graph.

I have said this before in the last post for selecting b and c.

You may ask why choose the may 2010 lows i might choose any. But there are certain rules to follow of finding this typical low and once found the market up move will divide into a perfect Golden Ratio no matter what the news is or whatever happens to the world, it is 99% predictable. It takes a lot of experience to find that typical low.

To make it more understandable::

You can't select any pair of b and c for market turns. If you select them and substitute in your rewritten equation can you show me from the graph the where the market would have turned???

 

 

For example lets take b= 2500 and your c = 5000 - b =5000 -2500= 2500

Sub them in your rewritten equation::

 

 

[imath]y_0 = 1.618 * 2500 + 2500[/imath]

 

[imath]y_0 = 6545 [/imath]

 

Well that would have predicted a value of 6545 but look from the graph it is clear that market turned down 18% from 6348 not from 6545 . If you knew this would be top in advance you would have exited the markets nearer to 6348.

Any b and c values give you a phi relation but not the important market turns.

 

PS:: I use 1.618% as a predictive equation to know where markets will reverse.

No theory in stock market will work 100% all time except a few like Golden Ratio Projection, but even in Golden Ratio projection because of human error humans select wrong b and c values of the equations most of times which most traders do, but even then one correct selection of b and c values is enough to take out all losses made by selecting wrong b and c values and make a decent profits.

 

PS2:: there is another equation i have which is scientific in nature to select the b and c values. But it is a closely held secret of mine. It took me a few years to find that b and c equations, which is a very simple equation actually. But being a human i do make errors many times in choosing b and c values because of emotions involved in trading.

 

As for the rest of the quotes you made i will come out with more evidences . Please give me sometime.

 

Application of Golden Ratio is the key here.

[Time_Travel]

 

TT, Are you claiming that someone predicted these crashes to within a few days or weeks, before the crashes actually occurred?

 

Can you provide evidence of this – a credible archive of a webpage, or trustworthy third-party certified dated document? Without such evidence, this is simply an unsupported claim.

 

 

Here is chart of Dow Jones, see From 1987 important bottom(panic bottom) to 2000 important top (internet burst). These years are selected and substituted in your rewritten equation.

 

[imath]

y_0 = y * c + b

[/imath]

 

where y= 1.618 , b = 1987 , c= 2000 - b = 2000 - 1987 = 13

 

Sub the values in the above equation gives::

 

y_0 = 1.618 * 13 + 1987

 

y_0 = 2008

 

2007-08 was the financial Year when the markets hit the top and crashed more than 50%.

 

All the important tops and bottoms of Dow Jones can be explained using Fibonacci time sequence as well.

 

A very simple application of Fibonacci Golden ratio on 2000th year would have predicted what was in place in 2008 for Dow Jones

[Maine farmer]

Is anyone else concerned that this could turn into a self-fulfilling prophecy? It realy doesn't matter if it is true or not. If enogh people who matter believe this act based on that belief, couldn't they make it happen? The stock market seems to me to be vulnerable to group psycology.

[Time_Travel]

Is anyone else concerned that this could turn into a self-fulfilling prophecy? It realy doesn't matter if it is true or not. If enogh people who matter believe this act based on that belief, couldn't they make it happen? The stock market seems to me to be vulnerable to group psycology.

 

 

What could turn into self fulfilling prophecy????? Yes stock market is vulnerable to group psycology more like herd psycology.

Stock markets can't be manipulated by groups as 99% of the group loose money in stock market.

[ChrYes]

Hey TT, if you're still around may I ask you about a few things ?