ONE44 Analytics where the analysis is concise and to the point
Our goal is to not only give you actionable information, but to help you understand why we think this is happening based on pure price analysis with Fibonacci retracements, that we believe are the underlying structure of all markets and Gann squares.
Here is a quick set of guidelines for the Fibonacci retracements to help with this article. You can find all the rules/guidelines and examples on any deviations from these four basic rules on our website.
1) The Golden rule, any market that is going to continue the current trend must hold 38.2% and a new high/low should follow.
2) Markets that are extremely strong/weak will only go 23.6% and a new high/low should follow. Typically a runaway market.
3) The 61.8% rule is, any market that holds 61.8% should go 61.8% of where it just came from. Usual happens when a market is directionless, or in a consolidation period.
4) The 78.6% rule is, any market that holds 78.6% should go 78.6% of where it just came from. This is also where a lot of Bull markets end and start.
The break from the 52,944 major Gann square and 61.8% (51,250) of the ATH and 2018 low has taken it to the 44,160 major Gann square and is right above 38.2% of the move up at 43,860, this is the long term swing point. Because the high area was 61.8% the break from it should take it to 61.8% the other way, this is 38,200. Holding the long term swing point keeps the current trend intact and you can look for new highs for the move and then 78.6% at 57,500, there is also a major Gann square at 57,700. Failing to hold the long term swing point should send it to 61.8% and most likely it goes into a wide trading range between the June low and Sept. high for the next few months.
The break from the area of 78.6% at 3840.00 and the 4032.00 major Gann square has already hit 38.2% of the move up at 3150.00, it traded below it on the 7th and tested it again on Friday, this is the long term swing point. Above it they go for new highs and then a new ATH. Below it can send it to 78.6% at 2200.00. Here too, if the long term swing point is taken out, it can go into a wide swinging trading range for the next few months.
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