Monday, October 8, 2012

The March 2009 Low and PHI Expansion

A chart similar to this was posted last evening and has generated several queries as to how it was produced. Here is a brief explanation:
  • The entire grid is based on the initial thrust off the March 6, 2009 low (A) to the first pivot high of June 11, 2009 (B)
  • The initial square is made by making the AB the left (earliest in time) side of the square. (1) dark red
  • The second square is formed above the first square. (1) bright red
  • The 2x2 square (2) is formed using the right hand side of squares 1 & 1.
  • The 3x3 square (3) is formed from the top sides of Square 1 and Square 2
  • Note how the 1x1 from the March 2009 low has acted as major support in 2011 and so far in 20012.
  • THe PHI expansion 1,1,2,3,5 is not the conventional method of creating a Fibonacci spiral but is made by moving the PHI expansion always into the future and--in this case--pointing upwards. A decline would move to the right and downwards.
Examine the fan lines and especially the intersection of the various fan lines. Many support and resistance levels are evident as well as several significant changes in trend where various fan lines intersect.
It is amazing that these points are determined from the initial thrust off the March 6, 2009 low. It demonstratwes the fractal nature of markets.
The current juncture of the S&P is fascinating since it has broken above the 2x1 from Square 1 but its highest level has been seen at a intersection of two 1x1 fan lines.


Dolemite said...

MUCH more clear
Thanks for the clarification

Gaurav Gupta said...

Can you update this chart. Looks like the 2X1 from Square 1 provided support to this month's low as well.