2008 Elliott Wave International

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Elliott Wave International, Inc.
P.O. Box 1618, Gainesville, GA 30503
(800) 336-1618 (770) 536-0309
Fax (770) 536-2514
www.elliottwave.com
Wayne Gorman
March 17, 2008
How You Can Identify Turning Points Using Fibonacci
Part 1: Understanding Fibonacci Mathematics
and its Connection to the Wave Principle
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Understanding the Fibonacci Relationship
in Financial Markets
Golden Ratio, PHI, , Golden Spiral
Examples in Nature, Human Biology and Human
Decision Making
Connection to the Wave Principle
Fibonacci Ratios and Multiples, Golden Section
Amplitude Relationships
Retracements Corrective Waves
Multiples Impulse and Corrective Waves
Fibonacci Dividers
Time Relationships
Fibonacci Clusters
Summary
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Golden Ratio, PHI,
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Golden Ratio, PHI,
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The Golden Ratio
PHI
.618 or 1.618
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The Golden Spiral
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The Golden Spiral in Nature
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The Golden Spiral in Nature
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The Golden Spiral in Nature
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The Golden Ratio in DNA
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The Golden Ratio in the Human Body
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The Golden Ratio in Human Decision Making
Binary-Choice Under Conditions
of Uncertainty
Opinion is predisposed to 62/38 inclination.
62% is associated with positive responses.
38% is associated with negative responses.
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Fibonacci-Based Behavior in Financial Markets
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Fibonacci-Based Behavior in Financial Markets
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Fibonacci-Based Behavior in Financial Markets
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Golden Ratio, PHI,
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Fibonacci Ratios and Multiples
Fibonacci
Sequence Ratio Inverse
Adjacent .618 1.618 (1.618)
1
Alternate .382 2.618 (1.618)
2
2
nd
Alternate .236 4.236 (1.618)
3
3
rd
Alternate .146 6.854 (1.618)
4
4
th
Alternate .090 11.089 (1.618)
5
N
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Fibonacci Relationships are Seen
in Time and Amplitude
Retracements
Multiples
Amplitude
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Retracements
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Retracements
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Retracements
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Retracements
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Retracements
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Retracements
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Retracements
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Multiples in Impulse Waves
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Multiples in Impulse Waves
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Multiples in Impulse Waves
Net of waves 1 through 3
times .382 = percent
movement of wave 5
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Multiples in Impulse Waves
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Multiples in Impulse Waves
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Multiples in Impulse Waves
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Multiples in Impulse Waves with Extensions
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Multiples in Impulse Waves with Extensions
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Multiples in Impulse Waves with Extensions
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Multiples in Impulse Waves with Extensions
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Fibonacci Dividers in Impulse Waves
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Fibonacci Dividers in Impulse Waves
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Fibonacci Dividers in Impulse Waves
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Fibonacci Dividers in Impulse Waves
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Fibonacci Dividers in Impulse Waves
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Fibonacci Dividers in Impulse Waves
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Multiples within Corrective Waves Zigzags
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Fibonacci Relationships
Single Zigzag
Wave C = Wave A
Wave C = .618 Wave A
Wave C = 1.618 Wave A
Wave C = .618 Wave A past Wave A
Double Zigzag
Wave Y = Wave W
Wave Y = .618 Wave W
Wave Y = 1.618 Wave W
Wave Y = .618 Wave W past Wave W
Triple Zigzag
Equality for W, Y and Z
Ratio of .618, i.e. Wave Z = .618 Wave Y
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Multiples within Zigzags
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Multiples within Zigzags
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Guidelines for Typical Retracements
of Wave A by Wave B in Zigzags
Wave B Net Retracement (%)
Zigzag 50-79
Triangle 38-50
Running Triangle 10-40
Flat 38-79
Combination 38-50
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Multiples for Flats
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Fibonacci Multiples for Expanded Flats
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Multiples within Flats
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Multiples for Triangles
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Multiples for Triangles
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Multiples for Triangles
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Multiples for Triangles
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Fibonacci Time Relationships
The progression of years from the 1928 (possible orthodox) and 1929
(nominal) high of the last Supercycle produces a Fibonacci sequence:
1929 + 3 = 1932 bear market bottom
1929 + 5 = 1934 correction bottom
1929 + 8 = 1937 bull market top
1929 + 13 = 1942 bear market bottom
1928 + 21 = 1949 bear market bottom
1928 + 34 = 1962 crash bottom
1928 + 55 = 1983 probable Supercycle peak
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Fibonacci Time Relationships
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Fibonacci Time Relationships
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Fibonacci Time Dividers in Impulse Waves
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Fibonacci Time Relationships
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Multiple Fibonacci Relationships
Fibonacci Clusters
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Summary
The Fibonacci Ratio ( ), an irrational number approximating .618,
known as the Golden Ratio, is found in nature, human biology,
human thought, and aggregate human behavior such as the stock
market.
The Wave Principle is a robust fractal governed by Fibonacci
mathematics.
Sharp wave corrections tend to retrace 61.8% or 50% of the
previous wave.
Sideways corrections tend to retrace 38.2% of the previous wave.
Subdivisions of impulse waves tend to be related by Fibonacci
numbers .618, 1.0, 1.618 and 2.618.
Subdivisions of corrective waves tend to be related by Fibonacci
numbers .382, .618, 1.0 and 1.618.
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Elliott Wave International
770-536-0309 or 800-336-1618
www.elliottwave.com