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2012 Market Review

2012 Market Review. Speed Retirement System January 4, 2012. The fibonacci sequence is derived by adding 1 + 2 and adding the result to the last number. i e , 1+2=3, 3+2 = 5, 5+3 =8, etc.

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2012 Market Review

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  1. 2012 Market Review Speed Retirement System January 4, 2012

  2. The fibonacci sequenceis derived by adding1 + 2 and adding theresult to the last number.ie, 1+2=3, 3+2= 5, 5+3 =8, etc

  3. The end result it that you geta numerical relationship betweenthe numerical sequence thatsome traders feel have significancein the marketplace.

  4. The main fib numbers are23.6%, 38.2%,61.8% and 100%There are two other levelsat 76.4 & 78.6%The expectation is that pricewill hold support (or resistance)at one of these percentages.

  5. I’m not going to go intoa lot of detail on the fibonaccisequence because youcan google it and findan incredible amount ofinformation on the subject.

  6. The other way the fib numbersare used are to predict priceextensions. The commonfib extensions are …1, 125%, 161.8% & 261.8%

  7. Ok, so how do you use this?One way to use the fib #’sare to see where you expectthe market to stop afteran impulse move.(either up or down)

  8. For example, after a stockmoves up and begins tocorrect, you wouldexpect the downmovecorrection to stop at either23.6%, 38.2%, 61.8% or 100%of the last upmove.

  9. The depth of the correctionwill give you a clue as toto the strength ofthe last upmove.For example, a correctionthat stops at under 50%is considered strong.

  10. Likewise, a stock that movesup (or down) less than100% of that last impulse moveis thought to beweakening.

  11. Remember, this worksfor both upmoves,as well as downmoves.

  12. I don’t want you to thinkthat this is the holy grail,but it can give you cluesat to what you expectthe price action to do.

  13. Let’s look at somereal world examples.

  14. For those of you whowere members when Speed Retirementstarted back in April of 2010,you will rememberthat I was looking for amarket top last April.

  15. This is why …

  16. Let’s look at arecent example …

  17. This is a 5 year monthly chartof the S & P 500 Index …

  18. I like to use the fib levelsin conjunction withprice bars. As you cansee, the 61.8% levelis VERY powerful!

  19. Let’s look at the Top of theMarket on May 2, 2011

  20. Let’s look at the MonthlyPrice formation on theS & P 500

  21. S & P 500Price & Time Projection

  22. We know that based onthe Double inside dayformation on the monthlycharts for the S & P 500, weexpect a big move afterthe high or the low istaken out.

  23. I’ve shown these chartsbefore, but these arethe two possible scenariosthat can happen.

  24. Scenario 1:

  25. Scenario 2:

  26. What conditions wouldconfirm either pattern?Pattern 1: Bear Market-a) Low at 1010 taken outb) the 21 ema to crossunder the 50 ema (at least)Pattern 2: Bull Market-a) A few closes above thehigh of the inside day, andb) preferable a close abovethe October high

  27. I know, but even duringthe big bear market of2007 to 2009, the 21 emadid not cross under the50 ema until it cost youa lot of money!

  28. Ok, so let’s shorten upthe ema’s on themonthly charts …

  29. Let’s project where themarket could go assumingthe “C” point isconfirmed at theOctober Low of 1074.

  30. Projection TopRange 1: 553+1074 = 1627 Range Average = 1530Range 2: 360 + 1074 = 1434100% of October Price BarAdded to the High =1292 + 218 =1510

  31. Price wants to retestold highs and theybecome naturalprice targets.Old highs are1440 and 1576 (historical high)

  32. Projected Time to TopRange 1 took 14 monthsRange 2 took 11 monthsAverage of the two = 12.5 monthsTherefore, the projected top,assuming a bottom inOctober 2011, is anywherefrom August 2012 to November 2012

  33. Upside resistance is at 1312.After that, the next majorresistance line is 1375.1437.50 is a key line onthe upside. I don’t expectwe take that out the firsttime up.Support lines are at 1250and then at 1218.

  34. This is from the October 5, 2010State of the MarketPresentation.

  35. Let’s look at sentiment& % of Stocks abovetheir 200 Day moving average.

  36. I don’t know if wewill get a generationalcorrection, like theone that ended onMarch 9, 2009,but we will haveopportunity!

  37. Buying at the generationalbottom in March 2009,afforded untold opportunity.Look at VCI, PCLN, GMCR, F,CAT, ARCC, LULU, CMG

  38. Thanks for Watching! Speed Retirement System January 4, 2012

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