ONE44 Analytics where the analysis is concise and to the point
In our opinion we believe that the Fibonacci retracements are the underlying structure of all markets and in these weekly examples we give educational and actionable information.
As usual we will go back to show you where it has come from and what key levels they held first, then bring you up to date.
Long term view of T-Bonds based on the Fibonacci retracements
Nearby Chart ZBH21
We will start this with the major 38.2% (155.24) retracement back to the 2018 low, this was hit in November 2019 and then again in January 2020. Based on the ONE44 Fibonacci rules and guidelines by holding 38.2% we should look for new highs for the move. That move higher led to the all-time high at 193.06.
The massive selloff from the ATH had one close below 171.26, this was 38.2% back to the 2018. low, however the low of this move hit 23.6% back to the 2000 low, showing how important it is to know all the extreme retracements. Based on our rules and guidelines we should be looking for new highs and AS ALWAYS we will watch all of the retracements on any move to see just how strong, or weak the market is.
The rally from 23.6% back to the 2000 low fell just short of 61.8% back to the ATH, on 4/3/20 and then again on 4/22/20. The 61.8% rule tells us to look for 61.8% the other way on a move away from this area. This happened on 6/5/20, they traded below it, but never closed below. (one close below is still acceptable). The rally from there took it back to just shy of 61.8% again on 8/6/20.
On each of the rallies in the current break that started from 8/6/20, you can see how the market got progressively weaker and not because it was going down, but where each attempted rally was stopped. The first one was on 9/3/20, it hit 61.8% back to 183.06 high. The next two could only rally 38.2% back to the same high on 11/5/20 and then again on 11/20/20. The last rally before the current low at 157.23, could only get up to 23.6% back to the high on 1/28/21 showing just how weak this market was.
The low on 2/25/21 at 157.23 hit 61.8% back to the 2018 low. Based on the 61.8% rule we could look for a rally to go 61.8% (179.24) back to the ATH, this would be a long term target as long as the current low holds and AS ALWAYS we will watch all the retracements back up to see just how weak, or strong the market is. A shorter term target to look for would be 171.10, this is 38.2% back to the ATH. Any rally from here that can't get above 23.6% at 166.00 would be a very negative sign, regardless of what retracement it held below and you could look for new lows.
There is one other area of support to watch if this current low is taken out and this is 153.20 and it is 38.2% back to the 2000 low.
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 and Gann squares.
You can get all the rules and guidelines to the Fibonacci retracements on our website
Sign up for our Free newsletter here.