|
|
|
|
December 19-21, 2003 Commentary
(weekend edition)- Today's commentary should prove to
be quite interesting. The concepts that I will cover today will very briefly
touch upon a fascinating area of Fibonacci research that I will be making
available some time next year. It has to do with Fibonacci and the time factor.
As I've alluded to in a few of my
books, I feel that time is just as 'harmonic' as price. I've
conducted a very informal 'market research' survey about what material my
customers would like me to cover in my next book (once I finish up 'Trade
Management, hopefully on time at the end of February). Of the choices that I
made available to the survey participants, one choice stood out very clearly,
and that was my work on Fibonacci time relationships. People just can't get
enough of new Fibonacci material. So as a sort of a lead in for my next work,
I'll start to include more charts and ideas showing the Fibonacci techniques
applied not only to price, but also to time. Since I've been working on a lot
of the material with regards to Fibonacci and time (I originally was planning
on this work being my second book), I'm hoping to have this new book completed
by next summer. Maybe that's too optimistic, but the readers want it, and I'm
going to do my best to provide it. Let's look at a pattern and grouping I
spotted on FISV. Two things really jumped out at me on this one. The first was
the tightness of the grouping. Almost every number I added fell just about
exactly on the other numbers. This is one of the tightest groupings I've ever
seen. Usually with this many numbers I get two or three groupings that are
fairly close together. This time everything laid out in one spot. Let's look at
the daily chart.
The 5-point pattern that I am looking at may
not be clear to the reader, so let me highlight that. I'll add on some labels
for the points, as well as retracements for the B and C points.
FISV not only has that extremely tight
grouping at the completion point, but the B and C points are extremely close to
.618 retracements. FISV is very harmonic. The pattern completion point has all
the 'standard' numbers falling on top of each other. The ABCD is a 1.0. The
1.618 BC external retracement is in there. The .886 of the XA leg, expansions,
you name it, it's all there. Now, I find FISV to be a very choppy stock. It falls in
that category I sometimes see, and that is choppy and very harmonic. Other
examples like this are SBUX and BBBY. They can form some great setups, all the
while chopping all over the place. The chop can make the trading very
difficult. Normally, I try to avoid such stocks. I looked at FISV further, though,
and noticed the time harmonics were just incredible, in my opinion. That piqued
my interest in this one. Let's look at some Fibonacci time relationships, just
like we might look the price relationships.
Here we see that the ABCD part of the pattern was an
.886 time retracement of the XA leg. In other words, the ABCD took .886 times
as long to form as the XA leg did. But recall that the ABCD is also an .886
retracement of the XA leg in terms of price.
Here we have a close-up of the BC retracement of the AB
leg. It was an exact .236 time retracement. Let's look at another time
relationship.
The AB leg is almost exactly a .382
time retracement of the XA leg. FISV is very 'time harmonic'. Let's finish with
one more time relationship.
Here I'm
looking at the relationship between the time it took the AB leg to form, and
the time it took the CD leg to form. Recall that the price projection was a
1.0. The time projection was very close to an .886. I rarely see an issue this
time harmonic. Now, does any of this guarantee that this grouping will
hold? Of course not. And do all these harmonic time relationships guarantee
that I will be able to make money trading FISV? Again, as you can guess, of
course not. What all this does, in my opinion, is give me a better
chance to develop an edge that I can use for my trading. Now I'm able
to not only zero in on price areas where I might want to consider a trade, but
I can also find clues as to when I might want to consider a trade. I
have found that I can use many of the same techniques with time as I do with
price. My Fibonacci time book will be all about forming Fibonacci time
groupings, and how I use them. It will be interesting, I can promise you
that.
|
|
|
|
|
|
NOTE: Reading this page or any page on the Kane
Trading website, or utilizing this website and any material
contained herein in any way, shall constitute an acknowledgement
that you have read, understood and agreed to all the
disclaimers,
terms & conditions, and
policies of this site.
|
|
This website is best viewed with
MSIE 6.0, text size set to medium, and screen resolution set to 1024 by 768.
Copyright © 2003 Kane
Trading. All rights reserved.
|
|