{"id":100405,"date":"2017-01-05T14:00:14","date_gmt":"2017-01-05T19:00:14","guid":{"rendered":"http:\/\/countingpips.com\/?p=100405"},"modified":"2017-01-05T17:27:04","modified_gmt":"2017-01-05T22:27:04","slug":"how-fibonacci-ratios-govern-the-stock-market","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/01\/how-fibonacci-ratios-govern-the-stock-market\/","title":{"rendered":"How Fibonacci Ratios Govern the Stock Market"},"content":{"rendered":"<div id=\"inves-2478626258\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">January 5, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><h3 style=\"margin-top: 0px;\"><span style=\"font-size: small;\">Scientists speculate that Elliott waves are the stock market&#8217;s &#8220;critical structure&#8221; <\/span><\/h3>\n<h3 style=\"margin-top: 0px;\"><span style=\"font-size: small;\">By Elliott Wave International<\/span><\/h3>\n<p>[Editor&#8217;s Note: The text version of the story is below.]<\/p>\n<p class=\"embed-responsive embed-responsive-16by9\" align=\"center\"><span class=\"LimelightEmbeddedPlayer\"> <script src=\"\/\/assets.delvenetworks.com\/player\/embed.js\"><\/script> <object id=\"limelight_player_281280\" class=\"LimelightEmbeddedPlayerFlash embed-responsive-item\" data=\"\/\/assets.delvenetworks.com\/player\/loader.swf\" type=\"application\/x-shockwave-flash\" name=\"limelight_player_281280\" width=\"600\" height=\"500\"><param name=\"movie\" value=\"\/\/assets.delvenetworks.com\/player\/loader.swf\" \/><param name=\"wmode\" value=\"window\" \/><param name=\"allowScriptAccess\" value=\"always\" \/><param name=\"allowFullScreen\" value=\"true\" \/><param name=\"flashVars\" value=\"channelId=&amp;deepLink=true&amp;playerForm=b549182c27004e88b54afaf008c55c81&amp;defaultQuality=0&amp;mediaId=d4e6802bf66c43c99d87092b59580316\" \/><\/object><\/span><\/p>\n<hr \/>\n<blockquote><p><strong>Learn How to Find Trading Opportunities Using Fibonacci<\/strong><\/p>\n<p>This free eBook takes the complexity out of combining wave analysis with Fibonacci relationships. In 14 chart-filled pages, you&#8217;ll learn techniques that you can apply to your trading right away to find targets and turning points in the charts you follow.<\/p>\n<p><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa656&amp;dy=aa010417&amp;url=http:\/\/www.elliottwave.com\/Free-Reports\/How-You-Can-Use-Fibonacci-to-Improve-Your-Trading\"><strong>Download Your Free eBook<\/strong><\/a><\/p><\/blockquote>\n<hr \/>\n<p>In the 1930s, Ralph Nelson Elliott observed the Wave Principle in the stock market. Yet his work gained little notice from Wall Street.<\/p>\n<p>In the decades that followed, a handful of analysts and forecasters kept Elliott&#8217;s work from falling into obscurity.<\/p>\n<p>But in recent decades, scientists re-discovered Elliott.<\/p>\n<p>Consider this 1996 quotation from &#8220;Stock Market Crashes, Precursors and Replicas&#8221; in France&#8217;s Journal of Physics:<\/p>\n<p style=\"margin-left: 0.5in;\">We speculate that the &#8216;Elliott waves&#8217; . . . could be a signature of an underlying critical structure of the stock market.<\/p><div id=\"inves-1819816957\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>Robert Prechter put it this way:<\/p>\n<p style=\"margin-left: 0.5in;\">Scientific discoveries have established that pattern formation is a fundamental characteristic of complex systems, which include financial markets. Some such systems undergo \u201cpunctuated growth,\u201d [or] building fractally into similar patterns of increasing size. This is precisely the type of pattern identified in market movements by R.N. Elliott.<\/p>\n<p>Nature is full of fractals.<\/p>\n<p>Consider branching fractals such as blood vessels or trees: A small tree branch looks like an approximate replica of a big branch, and the big branch looks similar in form to the entire tree.<\/p>\n<p>Now consider that most of nature&#8217;s fractals are governed by the <strong>Fibonacci sequence<\/strong>. It begins with 0 and 1, and each subsequent number is the sum of the previous two:\u00a0 0,1,1,2,3,5,8,13,21,34,55 and so on. The Fibonacci sequence also governs the number of waves that form in the movement of aggregate stock prices.<\/p>\n<p>Take a look at this figure from the Wall Street classic book, <em>Elliott Wave Principle<\/em>:<\/p>\n<p style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.elliottwave.com\/Stocks\/-\/media\/45FC32FC8E6C4EF7948A250F25DAFB9C.ashx?h=665&amp;w=600\" alt=\"\" width=\"600\" height=\"665\" \/><\/p>\n<p>The book notes:<\/p>\n<p style=\"margin-left: 0.5in;\">The essential structure of the market generates the complete Fibonacci sequence. The simplest expression of a correction is a straight-line decline. The simplest expression of an impulse is a straight-line advance. A complete cycle is two lines. In the next degree of complexity, the corresponding numbers are 3, 5 and 8. This sequence can be taken to infinity.<\/p>\n<p>Right now, the math of the market reveals a big clue about the trend of stocks.<\/p>\n<hr \/>\n<table class=\"body\" style=\"border: solid 5px #EAEAEA; padding: 10px;\">\n<tbody>\n<tr>\n<td valign=\"top\"><\/td>\n<td valign=\"top\">\n<h3><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa656&amp;dy=aa010417&amp;url=http:\/\/www.elliottwave.com\/Free-Reports\/How-You-Can-Use-Fibonacci-to-Improve-Your-Trading\">Learn How to Find Trading Opportunities Using Fibonacci<\/a><\/h3>\n<p>This free eBook takes the complexity out of combining wave analysis with Fibonacci relationships. In 14 chart-filled pages, you&#8217;ll learn techniques that you can apply to your trading right away to find targets and turning points in the charts you follow.<\/p>\n<p><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa656&amp;dy=aa010417&amp;url=http:\/\/www.elliottwave.com\/Free-Reports\/How-You-Can-Use-Fibonacci-to-Improve-Your-Trading\"><strong>Download Your Free eBook<\/strong><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div>\n<p style=\"padding-top: 10px; border-top: solid 1px #CCCCCC;\"><em>This article was syndicated by Elliott Wave International and was originally published under the headline <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa656&amp;dy=aa010417&amp;url=http:\/\/www.elliottwave.com\/Stocks\/How-Fibonacci-Ratios-Govern-the-Stock-Market\"><strong>How Fibonacci Ratios Govern the Stock Market<\/strong><\/a>. EWI is the world&#8217;s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Scientists speculate that Elliott waves are the stock market&#8217;s &#8220;critical structure&#8221; By Elliott Wave International [Editor&#8217;s Note: The text version of the story is below.] Learn How to Find Trading Opportunities Using Fibonacci This free eBook takes the complexity out of combining wave analysis with Fibonacci relationships. In 14 chart-filled pages, you&#8217;ll learn techniques that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-100405","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=100405"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100405\/revisions"}],"predecessor-version":[{"id":100406,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/100405\/revisions\/100406"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=100405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=100405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=100405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}