Wednesday, June 30, 2010

Not a Pretty Picture

It has been sometime since a chart of the TSX (Toronto Composite) was posted. As the potential of global market disintegration heightens, a look at the TSX indicates that it is definitely in the same precarious position.

July 2007-June 2010
  • When the radius of the bear decline (May 2008-March 2009) is projected forward in time horizontally, the Fibonacci harmonics are coincident with pivots. (see .38, .50, .62 & .78) Therefore, one can assume that the cycle energy that was present during the decline is still 'active' and predominant.
  • The cycle influence is due to subside in mid September. (when the horizontal projection is equal in length to the bear market decline vector.)
  • The predominant cycle is about to exert some significant downward pressure on the market since prices are approaching the ARC-RESISTANCE (blue arc)
  • The market recovered approximately 61.8% of its decline (63.09%) which was in the vicinity of two important lows made before the 2008 top.(possible 4th waves of lesser degree) (purple horizontal lines)
  • 10990.41 is the critical support if the possibility of a further bull stampede is viable--which is highly unlikely

November 2009 - June 2010
The shorter term graph shows how the 2 wave (March 2009-April 2010) high was formed and how the corrective wave played out. (assuming that the 2 wave is in).
  • the correction was a volatile 78.6% retracement structure.
  • the 10990.41 support is indicated on the graph. (last stand line)
  • Tuesday's opening was a candlestick gap which blew through the 200 day ema with ease.
  • At the same time prices re-entered the initial down channel formed from the April high.

These charts paint a very disconcerting picture of what could happen as we move towards autumn. (literally and figuratively)


Anonymous said...

"disconcerting picture"
Why did stocks go up 100% to 1000% in 12 months?
I don't understand reasons for such a bullish move based on borrow and spend policies.

Even more debt is not a solution to more debt.

Fibocycle said...

picture a transmission revolving at 14,000 rpm and slowly a defect in the gear case begins to unfold.
At first there is 'noise' and sub-par performance. Then the entire mechanics of the system explode due to fractured pieces of gears being swirled around at astronomical speeds.
This is where are economic system is headed due to the disconnect between morality and our economic system.