The Stock Market, Phi and the Fibonacci Series

[Nu Kua]

I am not sure if this belongs in Science or not and will not be offended if it is moved, although "paranormal" is NOT a good fit imho. Several theories are presented here that might be of value to those who follow this sort of thing.
I do not quite understand this although some aspects of it make sense to me, in the sense that I believe that there is a pattern to everything and that the trick is to be able to see it... but I am hoping someone with a better mind at mathematics and economic theory will be able to not only make use of it, but maybe even explain some of the more complicated stuff to me.
And of course some will think it's a bunch of bunk. Who knows?

The Stock Market, Phi and the Fibonacci Series

Changes in stock prices largely reflect human opinions, valuations and expectations. A study by mathematical psychologist Vladimir Lefebvre demonstrated that humans exhibit positive and negative evaluations of the opinions they hold in a ratio that approaches phi, with 61.8% positive and 38.2% negative.

The golden ratio, or phi, appears frequently enough in the timing of highs and lows and price resistance points that adding this tool to technical analysis of the markets may help to identify key turning points. The photos below illustrate how the Golden Mean Gauge
and Phi-based analysis software
can be used to identify these turns in the market. The middle arm of the gauge keeps the phi point of the outer arms as the gauge is opened and closed. The lines of the phi-based software are all in phi relationship to one another. The ratios of Fibonacci numbers, commonly used in technical market analysis, converge on phi as explained on the Fibonacci Series page...

Phi and Fibonacci numbers define the price movements of stocks in Elliott Wave Theory

Fibonacci numbers were used by W.D Gann and R.N. Elliott, pioneers in technical analysis of the stock market. In Elliott Wave Theory, all major market moves are described by a five-wave series, adding to the potential to identify the turns described above. The classic Elliott Wave series consists of an initial wave up, a second wave down (often retracing 61.8% of the initial move up), then the third wave (usually the largest) up again, then another retracement, and finally the fifth wave, which would exhaust the movement. In addition, each of the major waves (1, 3, and 5) could themselves be separated into subwaves, and so on, and exhibit other Fibonacci relationships...
(illustration on page)


Phi (1.618), the Golden Mean and the numbers of the Fibonacci series (0, 1, 1, 2, 3, 5, 8, ...) have been used with great success to analyze and predict stock market moves. Forbes ASAP featured a story on the work of scientist Stephen Wolfram in cellular automata (underlying rules that determine seemingly random phenomenon) stating "This seashell may hold the secret of stock market behavior, computers that think and the future of science..."

Markets may be as geometrically perfect as a spider's web.

Ermanometry

Ermanometry Research shows the markets to be perfectly patterned, explaining that humans, being part of nature, create perfect geometric relationships in their behaviors, not unlike a spider spinning a geometrically perfect web with no conscious awareness of its amazing feat. Ermanometry applies the logarithmic spirals found in sea shells with dynamic ratios in 3D to relate one market move to others.
Phi, or Golden Ratio, patterns often define the timing of highs and lows and price resistance points.

A Broad Overview of Ermanometry

...Plato, the Republic, Speaking of Geometricians:

“Do you not know also that although they make use of the visible forms and reason about them, they are thinking not of these, but of the ideals which they resemble; not of the figures which they draw, but of absolute square and the absolute diameter... they really seek to behold the things themselves which can be seen only with the eye of the mind.”

Ermanometry is an original work of technical analysis of the financial markets based on three decades of research by William T. Erman. This research provides compelling evidence that markets movements are governed by natural laws and thus perfectly patterned. Just as a spider spins a geometrically perfect web with apparently no conscious knowledge of the wondrous feat it performs, Ermanometry holds that humans interact in a way that creates geometrically perfect movements and cycles in their economic transactions. This premise is documented by evidence that relates major moves in the U.S. stock markets over the past century and has been found to be equally effective in explaining the movements of all freely traded markets, including Forex, commodities, financials, and index futures...

[olddragon]

Changes in stock prices largely reflect human opinions, valuations and expectations.

I think this is very true.
Prices reflect the mood of the markets.
Bad news, bring bad moods, brings lower expectations, brings down market prices.

Good news can do the opposite.

Many simply look at this as trends in the market.

[Sandstorm]

Originally Posted by olddragon

I think this is very true.
Prices reflect the mood of the markets.
Bad news, bring bad moods, brings lower expectations, brings down market prices.

Good news can do the opposite.

Many simply look at this as trends in the market.

I think the media has a lot to do with the mood of a nation and is the media controlled.....yes, so is this credit crunch orchestrated......yes....

[lycanox]

I doubt the US would willingly orchestrate its own downfall.

[Cartesiantheater]

Is there ANYTHING that can't be described by math?

Anyway, I don't know if I buy the results due to the source. However, the golden ratio isn't bullshit. It's a mathematical odditiy that has fascinated people for thousands of years.

For you Nu Kua (you said you don't quite understand it, so if it's the golden ratio itself you don't get, maybe this will help):


Basically, imagine if you cut a line into two segments, one big, and one large. The size of the pieces is "the golden ratio" if the ratio of the big piece to the little piece is the same as the ratio of the whole line to the big piece.



The actual numer is irrational, and it's about 1.618.

[Nu Kua]

Originally Posted by CT

Basically, imagine if you cut a line into two segments, one big, and one large. The size of the pieces is "the golden ratio" if the ratio of the big piece to the little piece is the same as the ratio of the whole line to the big piece.

So then the big piece kind of becomes the little piece, of the whole line?

[Cartesiantheater]

Originally Posted by Nu Kua

So then the big piece kind of becomes the little piece, of the whole line?

Yep. You have a golden ratio if all the pieces relate in that way. Apparently aspects of the psychology of how people react and interact with the stock market shows some ratios of that proportion (alledgedly- according to your articles, that is. Could be true, who knows?)

[Nu Kua]

Your illustration reminded me that the best, most pleasing art, photography, ect, is based on that rule. And you just keep flipping it out and over to find the other "Phi points" if you're looking where to place objects for the best view and most impact.
I edited my avvie pic remembering this! The edge of the cliff was exactly in the middle. Now it is about where the first "phi point" (is there an actual phrase for that? LOL) and I believe it is more pleasing to the eye than the first one.
This is the first one:


There is an Phi and Art section in the first link I posted regarding this. There is also a trial of an online phi-ruler, transparent, that you can lay over your online pictures in order to see how they do, or do not, conform to phi.


This is a picture I took while ago, and I used that Phi ruler to see if it followed the "rules" and it fit almost exactly.

I've taken probably 100 pictures of that very spot but this is the one most people like the best- and I do not think its the capture of that faint rainbow. There are other rainbow pictures, as rainbows fly off the mist of the waves as they crash on the rocks below that time of morning. I really wonder if it is because it follows Phi.
Apparently many of Leonardo's paintings used Phi, and even the human face and our standards of what makes a pleasing one relate to Phi as well.
Was poking around the site and found as well the seashell illustration, the spiral of which also conforms to Phi- and mention also of the human cochlea and the spiral designs found all in nature, such as the spiraling of sunflower seeds on the head.

It feels right to me that peaks and dips in human behavior might conform to Phi as well, all things connected, especially since it is true that the stock markets roller coaster ride accurately reveals the general "mood of the moment" far more than it reveals the true health of our economy.
The stock market watchers and worriers would probably kind of create their own Phi-mind-space then, which may or may not conform to what people who are uninterested in the whole thing might be feeling.

[Sandstorm]

Originally Posted by Nu Kua

Your illustration reminded me that the best, most pleasing art, photography, ect, is based on that rule. And you just keep flipping it out and over to find the other "Phi points" if you're looking where to place objects for the best view and most impact.
I edited my avvie pic remembering this! The edge of the cliff was exactly in the middle. Now it is about where the first "phi point" (is there an actual phrase for that? LOL) and I believe it is more pleasing to the eye than the first one.
This is the first one:
http://i117.photobucket.com/albums/o...s/ghstsea3.jpg

There is an Phi and Art section in the first link I posted regarding this. There is also a trial of an online phi-ruler, transparent, that you can lay over your online pictures in order to see how they do, or do not, conform to phi.


This is a picture I took while ago, and I used that Phi ruler to see if it followed the "rules" and it fit almost exactly.
http://i117.photobucket.com/albums/o...ShoreAcres.jpg
I've taken probably 100 pictures of that very spot but this is the one most people like the best- and I do not think its the capture of that faint rainbow. There are other rainbow pictures, as rainbows fly off the mist of the waves as they crash on the rocks below that time of morning. I really wonder if it is because it follows Phi.
Apparently many of Leonardo's paintings used Phi, and even the human face and our standards of what makes a pleasing one relate to Phi as well.
Was poking around the site and found as well the seashell illustration, the spiral of which also conforms to Phi- and mention also of the human cochlea and the spiral designs found all in nature, such as the spiraling of sunflower seeds on the head.

It feels right to me that peaks and dips in human behavior might conform to Phi as well, all things connected, especially since it is true that the stock markets roller coaster ride accurately reveals the general "mood of the moment" far more than it reveals the true health of our economy.
The stock market watchers and worriers would probably kind of create their own Phi-mind-space then, which may or may not conform to what people who are uninterested in the whole thing might be feeling.

I think as well Nu Kua you have used the rule of thirds very well in this picture. It is a very striking picture and the 1 in 100 shot was well worth the wait.

link: http://en.wikipedia.org/wiki/Rule_of_thirds

[phi0001]

You people discussing about great information!!!!
Maths can describe all things...
Nu Kua, Your information is very nice!!!

Prohome Income

[Beatnik Bob]

Originally Posted by Nu Kua

Apparently many of Leonardo's paintings used Phi, and even the human face and our standards of what makes a pleasing one relate to Phi as well.

Ahh, yes, the vitruvian man.

MORE ratio in the magical circle of solomon ( ).


And they say even god has the golden ratio. God = geometry. (thought Id put this since i came from a thread bout this anyway and it's relevant ):


Have better image in a book, but oh well, limitations of the internet.

Oh, HERE'S the image I'm looking for. FINALLY the internet comes through. Low quality though. (believe this PREDATES the vitruvian man EDIT: not the book Ultriusque Cosmi Historia, i meant the image this is derived from. Cosmic man).


Here's the popular one anyway: