When many market analysts talk about “timing” the market, they are typically talking about timing market entries and exits using their “PRICE axis” analysis. I do apply the Fibonacci ratios on the price axis of the markets all the time, and find this rather valuable. I also time market entries using the actual TIME axis of the market also. This adds another very important dimension to the analysis. I find that when both the time and price parameters come together at the same time, the odds for a market reversal are MUCH higher than usual.
For teaching experience, I’d like to share a couple of timing cycle examples on the S&P 500 Index (SPX). When I see a grouping of Fibonacci timing cycles come together, I watch for a reversal of whatever the market is doing INTO those cycles. For example, when the SPX was trading straight up into the WEEKLY cycles due 12/16 – 23, that was a heads-up to watch for a possible failure of the recent rally. It didn’t hurt that we also had met key upside targets in this market.
I’m not going to tell you that this will definitely be a major high, because I don’t know if that is the case. I will tell you however that the high is pivotal and if we hold below it we are vulnerable to more on the downside. We have not seen a huge decline from here, but at least my subscribers knew to have tight stops on longs and to consider the short side for a trade against these parameters. Note that the cycles on the DAILY chart also held up. Let’s look at that chart next.
The daily cycles for a high in the SPX came due 12/12-16. The actual high came in on 12/13 directly within this time window for a high. Like I’ve said in the past, no one REALLY knows where the market is going for sure…but with key price and time parameters to place some educated bets against….you can certainly make some money using this methodology! Good luck to everyone and Happy New Year!!!