The Contracting Fibonacci Spiral by David Petch
Capturing Human Psychology
Are the markets trapped? Find out about contracting
Fibonacci spirals and their implications for the financial
markets going forward.
Currently, the broad market indexes are trapped in a contracting
Fibonacci spiral (CFS), with the implications
of the CFS between December 2012 and 2020. Figure
1 illustrates the importance that a currency has within a
society. The method by which a currency is backed, be it by
a gold standard or fiat declaration, affects mass psychology.
Patterns of mass psychology form various cycles, which are
linked to progression through longer-term durations. The
stock market is the ultimate method of capturing human
psychology ranging from greed to fear, and every combination
In the 1930s, commodity-backed monetary policy tended
to make people more honest, which was a direct reflection of
this policy. As time went by, the economy became increasingly
unstable, bringing high-order events closer and closer in the
economy and markets. Every cycle has booms and busts, but
the CFS has numerous tops that have occurred within 5% of set
time posts, followed by corrections of at least 40% to 50%.