The idea of a harmonic is a deep esoteric one and a more complete explanation is outside the scope of this brief blog post. A simple way of thinking about harmonics is aptly described by the definition penned in the 1940s by physicists Wheeler and Feynman who posited that the Universe consists of a standing wave which develops harmonically related standing waves and each of these does the same.
In my research, I recently came across a publication by mathematician Fabio Oreste in the British Library in London that explains how to calculate and generate harmonic lines in the context of price charts. The approach says that harmonic lines will conform to 2 to the nth power, where n=0,1,2,3,4,… That is, there will be 1st level harmonics, 2nd level, 4th level, 8th level etc…
The image embedded in this post is the March 2014 futures price chart for the Dow Jones e-Mini contract. I have overlaid various harmonic lines on this chart. All of these are 1st order harmonics.
Note that the Jupiter lines (heavy red lines) align well to the late 2013 lows. A Jupiter harmonic can be seen just above the recent market highs. Price action of late has been sliding on the Dow and as of last Friday ( Jan 31, 2014) we can see that price action touched a Jupiter harmonic and then bounced higher intra-day. Curiously enough, this Jupiter harmonic line is also at the 50% Fibonacci retracement line of the October 2013-Dec 2013 move higher. When I see harmonic lines interacting with Fibonacci retracement lines I tend to pay particular attention.
The current timeframe also aligns to a Venus heliocentric cycle. From the late June 2013 correction until right about here and now is one full heliocentric trip of Venus around the Sun. So, now we have a major harmonic line that is working in concert with a Fibonacci retracement and a Venus heliocentric cycle.
So…there is compelling evidence that we are at a turning point on the Dow, but there still is possibility that price could drop more between now and ~Feb 6th when the Venus cycle completes. Any further price drop will likely be held in check by the Fibonacci 0.618 retracement and the agglomeration of Saturn, Neptune, Pluto harmonics in the ~15,300 area.
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