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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Tom McIlwain who wrote (6976)	5/10/2001 12:05:30 AM
From: Dan Duchardt	Respond to of 8925

Tom, Does anyone have any comments on this? Unless you are talking about % moves getting outside the -50% to +100% range the difference between linear and log spacing is not that that dramatic. The fib levels seldom correlate to turning points to better than a few % anyway, so the distortion is not that important. For the drop in the Naz used to calculate the fib levels on that chart, the range from 38.2% to 61.8% is only about 13% of the mid value at 2255. My guess is that most charting programs calculate the percentages and place them on the log chart since it is a much easier calculation than to overlay a liner fib scale on the log plot. I imagine some charting programs do have fib overlays that just count pixels, and that would result in a linear overlay, but for typical ranges the difference would not be important. While the 38.2%, 50%, and 61.8% may appear linearly spaced on the posted chart, I'll bet they are in fact correctly located on the log scale. Since the bottom of the first rectangle and the top of the second line up almost perfectly with the 50% level, if 50% were at the linear center between 2892 and 1619 (2255.5), those rectangles would have the same height. The bottom one is clearly taller. Dan