Excellent analysis! You have done an excellent job of capturing the long-term move complete with Fib reactions of the large-scale move, which clearly have more significance than any shorter term Fib grid off daily or weekly charts, or even since 1975!

I recommend everyone to view his post at the link above.

The more I do work with Fibonacci, the more I’m impressed. I don’t think I’m data mining, as some of the things I’m discovering are occurring by ‘accident’ or otherwise. It’s quite phenomenal. I don’t do much with the Fib retracements other than 38.2, 50, and 61.8 but I should branch out. I just don’t want too many lines on the chart if possible.

I’ll check those out! Thanks for the tip!

I heard it on TV this morning as I was waking up. Some TV guy asked “Dare I say it – have we hit a bottom?” I immediately turned the channel. That makes my stomach turn to hear TV people talking about bottoms. They’ve been doing so since early this year.

The ‘bottom’ will come when we put in a higher low, higher high, and then (or simultaneously) break cleanly above the 20 and 50 day (at least) EMAs. Until then, it’s best to follow the trend and stop trying to outguess Mr. Market’s ‘wisdom.’

If you draw long term line from 1930 to low of 1982, you will see the up trendline will give support by 4000! for Dow jones

Check this
http://man4urheart.blogspot.com/2008/11/dow-jones-long-term-view.html

In response to the question on why the S&P hit a low of 768.63 in Oct 2002, perhaps you can draw a price retracement using the monthly chart from the high in Mar 2000 (1552.87) all the way to the low of 768.63. It looks eerily beautiful how the the Fibb levels at 76.4%, 61.8%, 50%, 23.6% acted as resistance to the 4 rebounds when the S&P was on its way down.

The same observation can be seen if one draws the retracement from the Oct 2007 high. The 76.4% and 61.8% levels acted as resistance & coincide with the rebounds in May & Aug 2008. However, after Aug 2008, the S&P continued to drop and failed to rebound but instead bypassed the 50%, 38.2% retracements. I wondered why??

I do agree the level will be broken, but I see the potential for the Elliott 4th wave (ABC) which should play out into early 2009. There’s almost always a ‘holiday’ or ‘end-of-year’ rally which would play into the “Wave 4 theory” so I see the indexes rising through year’s end perhaps along with the ‘hope of change’ from an Obama administration, only to have something happen in early to mid-2009 which slams the indexes back down into a fractal 5 wave impulse down which takes out the lows at that point.

But again, we try to take it day by day as new information becomes available.

Those would be sort of ‘measured move’ patterns or I’d even go as far as to say bear-flag ‘like’ patterns. It’s possible we’ll get a measured move equal in stature to the previous move, but I think the support from last week will hold and tend to subscribe more to the “Wave 4 counter-move up” thesis that could be playing out currently. Plus, at least in the Dow, the recent level we tested was major (Fibonacci?) support so I’m one of those “I’ll believe it when we see it” or “I’ll change my view once we break last week’s support” in terms of immediate downside projections.