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Strategies & Market Trends : DAYTRADING Fundamentals
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To: TraderAlan who wrote (6217)12/28/1999 8:16:00 AM
From: Matthew L. Jones  Read Replies (5) of 18137
 
Thanks guys, for your help on this Fibonacci discussion. I appreciate it. I am sure that there is a certain amount of validity in the Fib numbers, probably as much because there is some "built in" or "genetically programmed" disposition to these ratios built into the human psyche as because people use them deliberately. When I did a ten year study on the intermediate price moves in the Nasdaq 100 index, I found it quite interesting that the average retracement on the NDX was 62% of the previous move. This was constant over 10 full years. Coincidental? I doubt it.

You guys also raised an interesting point-- kind of a "which came first, the chicken or the egg" thing: does the widespread use of a T/A tool negate it's validity? I, personally, would be happy if everyone out there used the same indicators and tools. That would give me a more predictability regarding the "madness of crowds".

I did a study on different moving averages (as support-resistance) on the S&P futures. I looked at every conceivable time frame and length, both simple and exponential. Funny thing was that I could not find a single one that had any degree of consistency (maybe slight correlation on the 10 and 20 but pretty random). The only consistent support-resistance levels were the previous day's high and low, the current day's high and low, and major turning points like 52 wk highs, etc. That is why I am so enthused about the viability of the Fib numbers because they seem to work (for whatever reason-- subconcious or conscious). Thanks again for the discussion.

Matt
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