Who was Fibonacci and why is his mathematical sequence so important?
Bob Prechter: Leonardo of Pisa was the son of a successful merchant named Bonacci, thus “fi” for “son of” Bonacci. Fibonacci introduced the Arabic number system to the Western world and was the most famous mathematician of his time. In the 13th century, he would entertain royal courts with mathematical problems. One of those problems was the famous rabbit problem [How will a pair of rabbits multiply?] the answer to which is the sequence named after him: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, and so on. Start with one and add the preceding number to it to get the next number in the sequence. Actually, Fibonacci re-discovered the sequence and the ratio which governs it, which had been known by the Greeks and as far back as the ancient Egyptians. It has been treated as a very special thing by mathematicians and scientists that far back, and to this day. How does this sequence relate to the market? Bob Prechter: In the stock market, the simplest description of a bear market is a straight line d
