This post is just to show why we feel the Fibonacci retracements are the underlying structure of all markets.
It Is Everywhere.
Archer-Daniels-Midland is breaking from a 61.8% Fibonacci retracement at 87.25. The $6.00 setback has now hit 38.2% of the 6/1/23 low and 7/27/23 high at 80.70. The ONE44 38.2% rule says, this is the level that should hold to keep the current trend intact and a new high should follow.
Before we get to the upside target as long as it holds and what to look for if it fails, I want to go over what has happened since the November high based on the Fibonacci retracements with the ONE44 rules and guidelines.
When the high was made on 11/4/22 the first setback held 23.6% back to the 7/14/22 low and 38.2% back to the 9/29/22 low and failed to make a new high that came in the area of a 78.6% retracement at 96.50 on 12/27/23. Following the ONE44 78.6% rule we know this is where a lot of Bull runs can end as this one did.
The next move down is why we watch all the retracements regardless of any longer term target to see just how weak, or strong the market is. The 38.2% level failed to turn the market back up on 1/4/23, however the rally back above it could only get to 38.2% back to the 11/4/22 high at 89.10 on 1/17/23. By doing this it showed the trend has truly turned down. The next 61.8% level at 80.87 failed to put in a lasting low and the spike up from it could only go 23.6% back at 84.90 and that sent it to 78.6% at 76.00.
The next rally went to 38.2% back to the 11/4/22 high at 82.95 on 4/19/23 keeping the trend negative. The setback from it took it to new lows and into a long term 38.2% back to the 2020 low at 72.20. It did have a few closes below it, but once back above it the long term target would be new highs for the move, so you can look for a bigger move out of this area.
The bigger move did happen and the 38.2% level at 80.75 only turned the market down for a few days and the rally went right to 61.8% at 80.70 on 7/27/23.
Where we are now,
The ONE44 61.8% rule gives us a target of 61.8% the other way at 76.60. Once again watching all the retracements, it is at 38.2% back to the 6/1/23 low at 80.70. Provided this level holds, the current trend remains positive and the target will be new highs for the move and then the area of the 90.89 major Gann square and 78.6% at 92.10. On a rally you still have to watch the 78.6% level back to the recent high at 85.95, as a failure to make a new high in this area can send the market sharply lower. A failure to turn up from 80.70 should complete the 61.8% to 61.8% target.