Fib time...

I don't really post about Fibonnacci numbers because i don't understand the mathematical workings of Fibonnaci, BUT one thing i know is that a lot of people use Fibonnaci and thus these 'numbers/points' create support and resistance lines because 'so many people use them'; thus they become psychological points.

Here is an interesting comparison of the recent 'highs and lows' of June as per the Fibonnaci numbers. You can see that the XJO has retraced back of the June lows to the 50% line BUT the DJIA has only retraced back to the 38.2% and is hovering just above the 23.60%

For me this is showing mass divergence; If the DJIA falls then the XJO will fall even harder and if the DJIA rises than the XJO will most likely stay flat. For me this has created a low risk trade on the downside, i'm actually expecting the XJO to hit the 61.8% number and then fall.





-Note; end of finacial year tomorrow, expect the unexpected but i think it will be a big non-event as in previuos years.

safe trading