Here's a historical review of the major swings in the stock market and the Fibonacci relationships.
According to long-term Fibonacci›
support and resistance
levels in the Dow Jones
Industrial Average (DJIA), we
are approaching a notable resistance
level in the stock market.
Many books have been
written on the Fibonacci sequence
and its many mathematical
relationships; this article
will not delve into those
in any great detail. For those who are unfamiliar with the
Fibonacci sequence, however, I will briefly discuss its basis
and a few of its mathematical relationships and how they are
relevant to investors.
Leonardo of Pisa, a 13th-century mathematician, illustrated
what would later be known as the Fibonacci sequence
in his work Liber Abacci, although its mathematical relation-ships
were not detailed until much later. The Fibonacci
sequence is an additive sequence in which each number is the
sum of the two numbers preceding it. Beginning the sequence
with 1, it progresses thus: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89,
144, 233, 377, 610, 987, 1597...on to infinity.