Fibonacci Chart of the Week
We believe that the Fibonacci retracements are the underlying structure of all markets and in these weekly examples we give educational and actionable information.
All of the rules/guidelines along with other examples can be found here, https://www.one44analytics.com/fibonacci-retracements-rules/
JPM
This week's example is JPM and it deals mainly with the 61.8% retracements.
We know that when a market is in a very strong position it will only retrace 23.6% and in order to keep the trend intact it must hold 38.2%.
When a market retraces 61.8% we know to look for a move of 61.8% of where it just came from based on the ONE44 61.8% rule. This can also cause extended trading ranges.
When a market retraces 61.8% we know to look for a move of 61.8% of where it just came from based on the ONE44 61.8% rule. This can also cause extended trading ranges.
We will first start with the high on 4/9/20 (1), it had one close above 38.2% of the move down and then closed right back below it. When using the 38.2% rule, we know that it should make a new low on a break from there to keep the current trend intact and on a failure to make a new low (2) the target becomes 61.8% (A) of that same move. The rally fell less than 1$ away from that target, but what to look for was still the same, 61.8% of where it just came from. This was achieved on 6/26/20 at 92.00 (B). This being 61.8% our new target is 61.8% back of where they just came from. That target was hit on 8/12/20 at 106.00 (C). Keeping with the 61.8% rule we will look for 61.8% again. This happened on 8/20/20 at 97.00 (D). The rally from there failed to get above the 106.00/61.8% level. The break from there took them back down to the 61.8% level previously hit at 92.00 (E) keeping the extended trading range intact.
Currently, until they can get a couple solid close's above 106.00 expect the trading range to continue and look for a break to 61.8% of the current rally at 96.00. Once they can get a couple solid close's above 106.00, look for 61.8% back to the all-time high again at 116.00.
