The Magic Dow or SP500 trading formula

I developed and studied this concept for a while now. Is this the end all be all trading formula?

Probably not, but it will give you an idea of where the market will cycle through during the

next 90 days. I have tried to make this trading formula as simple as possible, so let give it a try.

1.) Pull up a stockcharts.com chart.

2.) Enter $INDU for the DOW or $SPX for the SP500.

3.) Set to weekly and use 3 years.

4.) Set the type to Line (thin) and size to landscape.

5.) Hit update.

6.) Hit annotate and your chart will pop up.

7.) Hit the vertical line tool.

8.) Draw a line every three boxes. (see my chart)

9.) Now grab the Fibonacci Retracement tool.

10.) Take two consecutive cycles and find the high and low. Place the 100%

marker on the high and 0% on the low. Now stretch the tool one cycle to

the right. Presto! You have your chart laid out for the next cycle along with

price targets.

Special note - This formula only has one rule! If the 100% or 0% marker is

broke, use this formula to figure out the new high or new low.

A.) If the 0% marker is broke, subtract the 38.2% value from the 0%.

Example from the chart. 38.2% (7653.24) minus 0% (6597.85) equals 1,055.39.

Take the 0% (6597.85) and subtract it by 1,055.39. This equals 5,542.46 which

would be your new projected low.

B.) If the 100% marker is broke, subtract the 100% value from the 61.8% value.

Take this value and add it to the 100% value. This would be your new projected high.