If you like technical analysis, here's one of the granddaddies for predicting stock prices. It uses Fibonacci numbers.

You probably are wondering where the word Fibonacci came from. Fibonacci, also know as Leonardo of Pisa, was an Italian mathematician who lived in the 1200s. He worked out a simple progression of numbers starting with 1 and adding the previous number to get the next number. The Fibonacci numbers are 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and so on.

"The stock market has now fulfilled our forecast made back in February for a rise to 9,000-10,000," says Robert Prechter. In The Elliott Wave Theorist, he now sees increasing risk.

"The rally in the S&P since March has been one of the faster ever, rising 50% in five months, and rapidly carrying the S&P to the lower end of our general target zone of 1000-1100.

"At the same time, optimism has finally reached 'Primary degree' levels. The daily sentiment index recently reported 88% bulls among S&P traders, a reading equal to that on October 9, 2007, the top day of the 'Cycle B wave' when the Dow made its all-time closing high of 14,164. Higher readings are possible, but we are no longer compelled to wait.