Opinions, Prices and Fibonacci Structures

Abstract

In the financial markets, contradictory opinions generate a set of constraints which mediate information through a system of expected target prices. As a result, prices are a measure of value as much as they are an indication of how these expectations concerning value remain valid. Thus, path dependent negative and positive feedback loops modify price action, driving it away from random behavior. This study shows that complexity at work tends to be structured by Fibonacci numbers and ratios thus creating conditions for the emergence of constrained patterns which can lead to a renewed approach of forecasting and risk monitoring.