happy charts

[happy]

Suggestion:

How about a thread to explain your Fan Charts - I think people will find the explanations interesting

 

I find fibonacci fanlines can be helpful in confirming a trend change. Much like fibonacci retracement lines (measured from high to low), fibonacci fanlines often identify important resistance/support lines, which can be both helpful in short term trading, or (as is my preference) in determining the strength or validity of a recent low in the context of an intermediate or long term trend change. E.g., a test and rejection of the 61.8% fanline can be viewed as bullish in the context of an emerging uptrend (i.e., validates the recent low), and vice versa, bearish in the context of an emerging downtrend (i.e., validates the recent high). Generally, a successful breach of the 38.2% line targets the 50% line, and so on. It should be added that fanlines do not have predictive capacity, they simply identify lines that often (not always) act as resistance/support levels. As such, they are best regarded as pragmatic guidelines.

 

So, for example, using the August 2011 high and May 2012 low in Gold, we get the following fan (with the recent November test and rejection of the 61.8% line):

 

 

 

and a look at the weekly:

 

[happy]

Obviously fanlines are just one of many technical tools ... but for what its worth, here are some other interesting fan charts:

 

 

 

 

 

[drbubb]

This looks something like Gann to me.

 

I never understood Gann Angles, since there were so many different ways to draw the charts

[happy]

This looks something like Gann to me.

 

I never understood Gann Angles, since there were so many different ways to draw the charts

 

I haven't really looked into Gann, but in Technical Analysis in general there are many ways to draw charts. Although there are many useful rules and patterns, there can be no rule for how one should apply these rules (a version of the classic Wittgenstein rule following problem) ... it is up to interpretation and ultimately experience.

 

I view fibonacci fans in a similar way as fibonacci retracement lines. You first have to decide which high and low point you want to look at - this is ultimately arbitrary. What results are three fan lines that often represent resistance/support. However, just as with fibonacci retracements, they do not always work, e.g., sometimes it can look as though a chart completely ignores the fan lines. But when a set of fan lines do seem to identify resistance/support areas, the results can be quite striking.

 

E.g., taking the 2008 high in the Euro and the 2010 low in the Euro one gets the following fan lines:

 

 

 

The way I would interpret this chart is something as follows:

 

 

Since the 2008 high, the Euro has been in a general downtrend. However, the low was actually set back in 2010. In order to evaluate current price action in the context of the 2008 - 2010 decline we use the 2008 high and 2010 low to draw our fibonacci fan. What results are (imo) some interesting fan lines.

 

E.g., we can see that the first rise out of the 2010 low met resistance at the 31.2% line. After a brief correction, the rally resumed, violating the 31.2% line and the 50% line, finally exhausting at the 61.8% line. We then see the price fall back through the 50% line, but holding the 31.2% line, after which the uptrend resumed, encountering minimal resistance at the 50% and 61.8% lines. Following the April 2011 high, the decline into October 2011 briefly pierced the 61.8% line which was later violated into December 2011. The rebound into early 2012 failed to convincingly reject the 61.8% line ultimately falling back down towards the 50% line. The recent test and apparent rejection of the 61.8% line looks constructive … but of course this is only in the context of the 2008 - 2010 decline. It does not mean the Euro will go to new highs (of course, it does not exclude this possibility either). It simply means, for the moment, the 2010 low as been reconfirmed.

[happy]

. . . similarly, there is no reason why we couldn't also look at the current price action in the context of the recent 2011 - 2012 decline:

 

 

 

or the more recent July - September rally:

 

[drbubb]

This chart may make your head spin...

 

 

But it is designed to show the down channel that I have identified

[happy]

This chart may make your head spin... but it is designed to show the down channel that I have identified

 

Those are nice looking channels! Clearly the 130 mark looks significant.

 

I suppose the bull argument would be that the 127 support (from June high) held and we have only seen the first leg in the case of an ABC or AB=CD counter trend rally. Also, the July low coincided with significant hysteria regarding the future of the Euro and the EU. Obviously the problems there are "baked in the cake" (so to speak) but I would not be surprised to see a sharp rally into the new year, e.g., targeting 138-140 (?)

[happy]

GDX update: lets see how GDX does on its second attempt to breach the 61.8% descending line

 

before / after

 

 

 

[happy]

SSEC update: Shanghai continues sliding lower

 

 

 

 

HSI update: daily action in Hong Kong looks ready for a correction

 

 

 

... descending trend line continues to act as resistance

 

 

 

Cf.

Hong Kong looks more constructive, although it's just bumped against a decending trendline:

 

HSI (Hong Kong Hang Seng) weekly

 

[drbubb]

The break of 2,000 by SSEC could be important,

and could drag HSI lower if it continues

 

Mind the Gap

[happy]

Mind the Gap

 

 

Indeed. Going back to early June, the gap looks more like a chasm:

 

 

 

and a longer term view:

 

[happy]

Updating some charts:

 

Gold Take 1

 

 

Gold Take 2

 

 

Gold Take 3

 

[drbubb]

Gold - there's room for a retest of the recent lows - But that may be fine

[drbubb]

Happy,

Have you charted IWM recently?

 

IWM / iShares Russell 2000 Index Fund ... update : 1-year

 

 

[happy]

Happy,

Have you charted IWM recently?

 

I can't really add more than you have outlined above . . .

 

Looking at the weekly chart: the trend line remains intact and there remain several layers of support, although MACD looks close to rolling over.

 

 

 

Looking at the daily chart: negative divergence between price and RSI/MACD suggests further correction, the two obvious points of support coinciding with the gaps you've noted. At this stage it looks more like the (possible) beginning of a topping process.

 

 

 

If we were to correct down to the 77.5 level, then the picture would turn neutral, as the uptrend from November 2012 low (or June 2012 low) would have been broken (as per fanlines), and could set up a bearish scenario where we rally into the summer, but fail to take out the March 2013 highs ... etc. Obviously that's a big "if"

 

[drbubb]

Very nice work indeed!

 

Thanks for posting those.

 

(BTW, do you mind if I move this thread to the Blogs section? / ie Section#1, with DrBubb's Diary?)

[happy]

(BTW, do you mind if I move this thread to the Blogs section? / ie Section#1, with DrBubb's Diary?)

 

Not at all :-)

[happy]

I haven't really looked into Gann, but in Technical Analysis in general there are many ways to draw charts. Although there are many useful rules and patterns, there can be no rule for how one should apply these rules (a version of the classic Wittgenstein rule following problem) ... it is up to interpretation and ultimately experience.

 

I view fibonacci fans in a similar way as fibonacci retracement lines. You first have to decide which high and low point you want to look at - this is ultimately arbitrary. What results are three fan lines that often represent resistance/support. However, just as with fibonacci retracements, they do not always work, e.g., sometimes it can look as though a chart completely ignores the fan lines. But when a set of fan lines do seem to identify resistance/support areas, the results can be quite striking.

 

E.g., taking the 2008 high in the Euro and the 2010 low in the Euro one gets the following fan lines:

 

 

 

The way I would interpret this chart is something as follows:

 

 

Since the 2008 high, the Euro has been in a general downtrend. However, the low was actually set back in 2010. In order to evaluate current price action in the context of the 2008 - 2010 decline we use the 2008 high and 2010 low to draw our fibonacci fan. What results are (imo) some interesting fan lines.

 

E.g., we can see that the first rise out of the 2010 low met resistance at the 38.2% line. After a brief correction, the rally resumed, violating the 38.2% line and the 50% line, finally exhausting at the 61.8% line. We then see the price fall back through the 50% line, but holding the 38.2% line, after which the uptrend resumed, encountering minimal resistance at the 50% and 61.8% lines. Following the April 2011 high, the decline into October 2011 briefly pierced the 61.8% line which was later violated into December 2011. The rebound into early 2012 failed to convincingly reject the 61.8% line ultimately falling back down towards the 50% line. The recent test and apparent rejection of the 61.8% line looks constructive … but of course this is only in the context of the 2008 - 2010 decline. It does not mean the Euro will go to new highs (of course, it does not exclude this possibility either). It simply means, for the moment, the 2010 low as been reconfirmed.

 

 

update on the Euro: rejection of the 61.8% line remains in tact, currently approaching important support level (w/ coincides with rejection of fan-line), provided it can hold support, outlook remains constructive.

 

 

 

 

[Edit: as an aside, the Euro has respected the parallel trend lines very nicely so far, see below]

 

[happy]

Australian Dollar: technical picture has been slowly deteriorating since 2011 peak. Currently facing overhead resistance from both descending trendline and recently rejected 50% fanline. Should we see an accelerated downturn 95 +/- looks like it would provide important support.

 

[drbubb]

Nice one !

A$ does look vulnerable - it is a sort of: Hyper-US$

[happy]

update on Shanghai and Hong Kong: encouraging signs in Shanghai, positive divergence marking possible bottom, RSI breaking out of longterm downtrend; meanwhile, Hong Kong continues to look positive, rejecting descending trend line and recently rallying from horizontal support.

 

 

 

[happy]

China iShares:

 

 

 

 

Hong Kong iShares:

 

[drbubb]

Very nice chart - seems to be set up for a buy

[happy]

random chart: Johnson & Johnson

 

[happy]

For what its worth, stockcharts has added economic indicators:

 

 

 

E.g., long term look at S&P / CPI:

 

 

 

vs inverse Unemployment Rate: