A simple series of numbers can sometimes get misinterpreted (promoted) to be something magical. Personally, I see no value in the actual numbers that make up the Fibonacci series (a series developed by an Italian mathematician (Fibonacci) in the thirteenth century to help understand the propagation of rabbits). First I must say that I do value the ratio of the numbers that are expanded in a Fibonacci-like series (1,1,2,3,5,8,13,21,34,55,89,…). That ratio is 0.618 (and its reciprocal 1.618), often called the golden ratio because of its wide occurrence in nature. Here is a fact: the actual numbers in the Fibonacci series have little to do with the ratio. Any two numbersexpanded in the same manner will produce the same “golden” ratio. Here is a test:

Try it with 2 and 19. Add them together, and then add the total to the previous number just like in the Fibonacci series (21921, 192140, 214061, etc.). Expand this until you get to some four-digit numbers so that the accuracy will be acceptable (2, 19, 21, 40, 61, 101, 162, 263, 425, 688, 1113, 1801, 2914, 4716,. . .).

The last two numbers in this sequence are the two numbers that I will use for this example: 2914 and 4716. Now divide the first number by the second number, and you will get 0.618. This is exactly the same as with the one obtained using the Fibonacci series of numbers. So why did I pick 2 and 19 for this example? Hint: the second letter in the alphabet is B. Think about it. What is the nineteenth letter? And that is what numerology is all about. One last thing, the Fibonacci series also failed at understanding or predicting the propagation of rabbits. It is the ratio that is important, not the actual numbers in the series. So, when you hear someone say they are going to use a 34-day moving average because 34 is a Fibonacci number, you can immediately begin to have reservations about the rest of his analysis.

Source: The Complete Guide to Market Breadth Indicators by Gregory L. Morris