Update on the DJIA, SPX, COMPX, and NDX - June 9th, 2023.
Fibonacci sequence: a cause for parabolic moves in the US Indices?
Introduction
During the previous week's analysis, I delved into the parabolic movement of the US indices. This phenomenon results from the intersection of multiple cycles, which are often connected by Fibonacci relationships in both price and time. When multiple cycles intersect, there is a higher likelihood of a trend reversal.
This week, I conducted a Fibonacci analysis in time, using significant pivots on the SPX to determine when important cycles from different pivots might align.
The Golden Ratio is a commonly known Fibonacci ratio that can be observed throughout the Universe. It can even be seen in the human body, where body parts can be linked to Fibonacci sequences and ratios. For instance, the bone structure in our fingers, from the knuckle to the wrist, follows the Fibonacci series. Our hands have a total of 8 fingers with 5 digits on each hand. Each finger has 3 bones, while the thumb has 2 bones. Moreover, each hand has 1 thumb.
According to W.D. Gann, as mentioned in his Stock Market Course, the human body represents time cycles and angles of measurement. While it's uncertain whether Gann was familiar with the Fibonacci sequence, the ratios and angles he employed - specifically 37.5%, 50%, and 62.5% - closely resemble those of Fibonacci, which are 38.2%, 50%, and 61.8%. These ratios are frequently used as retracement levels to identify crucial support or resistance price levels.
In this week's update, I will show you a Fibonacci analysis of the SPX and how this may complement the analysis of the parabolic moves we see unfolding in the US Indices. As always, the weekly charts on the DJIA, SPX, COMPX, and NDX will show what the Gann Master cycles tell us for the weeks ahead.
This analysis is intended for general informational & educational purposes only. Hypothetical or simulated performance based on past cycles has many limitations. Cycles can contract, extend, and invert. Anomalies can occur. Hence, past performance is no guarantee for the future. No advice. Please take a look at our full disclaimer.