Since there is not much else to report, thought I'd show this interesting looking chart from a fibonacci perspective. The below chart is, you guessed it, the TSX-V Index. What you see is a five year chart of an index that has outperformed almost every other index in the world in the years until 2006.

The 2007 high was approximately 3372 and the bottom in 2009 was around 678. Now, Fibonacci-analysis says that pretty much everything in life moves in certain predictable sequences. Whether used for predicting the reproduction numbers of rabbits or for stocks, it is undeniably an interesting theory to read more about.

When using Fibonacci for technical analysis, the standard retracement levels are as follows: 23.6%, 38.2%, 50%, 61.8%, 100%, 161.8% etc etc.

In short, the 50% retracement level is calculated as follows: 678 + (0.5 x (3372 - 678)) = 2025. We broke through that level on the 8th and 9th of November, but that was not confirmed by three days of closes higher than that fibonacci level and was then followed by a small correction. We then moved back up above the 2025 level on the 25th and we are currently experiencing the third day above that level, so a close above 2025 would generally be considered bullish and would pave the way up until the next, very important level of 61.8% retracement which is around 2736.

Interesting to see as well that the earlier retracement levels were rather reliable this year and showed how good fibonacci can help technical traders.

If one were to combine the below with the Elliott Wave theory, we are currently in wave three out of five in the uptrend which is the dominant pattern. This means that we still have a long way to go and the direction is up. Don't be surprised if the old highs are shot to pieces in about two years' time.

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