PhiMatrix™ Tutorials:  Lesson 5 - Analyzing stock market timing and price trends

This lesson illustrates how PhiMatrix can be used to analyze timing and price trends in the stocks and financial markets.

Background

The Fibonacci Series has long been used in technical analysis of the markets.  Fibonacci number relationships, however, are only approximations of the true phi relationship of 1.618... used by PhiMatrix.

Learn more about application of Fibonacci principles to the markets at GoldenNumber or Elliott Wave International.

Application of PhiMatrix to Stock Charts

Click and drag the PhiMatrix application to resize it so that the corners of the grid align with major high or lows in the market.

The grid will be easier to position if you reduce the level of Transparency option on the toolbox.

Adjust the number of vertical grid lines to seek key timing points in the market.  Use "Mirror Vertical Lines" from the Orientation option to add timing lines on both sides of the midpoint.

Adjust the number of horizontal grid lines to seek key price levels in the market.  Use "Mirror Horizontal Lines" from the Orientation option to add price resistance point lines on both sides of the midpoint.

Examples of application of these techniques are below.

Dow Jones Industrial Average, January 2004 through November 2004

Note how two key pricing lows coincide with the two primary vertical phi lines.

Note too that the three interim highs achieved between January 2004 and November 2004 coincide with the horizontal phi lines.

Dow Jones Industrial Average, January 2002 through June 2003

Note how the first major low in prices coincides with the vertical phi line.

Dow Jones Industrial Average, January 2000 through June 2001

Note how the highs and lows in pricing through this period match up with the horizontal phi lines, showing resistance points in market pricing.

Once you have identified key price and timing points, use the grid to project potential price levels and timing points for future periods.

Legal notice:  No express or implied warranties of given in the use of this tool.  The user assumes all risk for results of decisions made.  It is highly recommended that the advice of a qualified investment advisor be obtained in making investment decisions and that other analytics and tools are used in making any investment or trading decisions.