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.
For the ONE44 Fibonacci rules and guidelines to help with this article, go here.
Charts are courtesy of Barchart.com
In our last update on 1/19/22 "NASDAQ 100 holds key area overnight" we left off with...
"Taking out 15,000 should mean a longer term top is in and if so, our long term target area will be 13,060 to 12,870, this is 23.6% back to the 2008 low, 38.2% back to the 2020 low and a major Gann square." In this same post we showed you what setup this current break from the ATH.
The rally from 15,000 could not even get back to 23.6% of the break from the ATH and following the ONE44 Fibonacci rules we know this is a very negative sign especially after hitting such a key level below. By taking out 15,000 it gave us the new downside target of 13,060 to 12,870 mentioned above. As we always say, we watch all the retracements on any move to see just how weak, or strong the market is regardless of the long term target. With that said, we can now watch all the retracements back up to the ATH to see if the down move is going to continue to our long term target area based on the same rules.
The short term trend will remain negative as long as any rally fails to close above 38.2% at 14,900, it can always trade above/below these levels, however it is the close that matters. Just above 14,900 is the 200 day average at 15,005 and a major Gann square at 15,043, so this will be a key area to overcome. Not getting above 23.6% at 14,400 is a very negative sign and it should quickly go for new lows. There is also a major Gann square at 14,466. As you can see on the chart below the red horizontal lines on it are major Gann squares and very good for using as swing points and targets. You will see a lot of highs and lows on these levels, here too the close is key to violating them.
If you are looking for option plays to go with the ONE44 levels, we highly recommend going to the Barchart webinar library where John Rowland has plenty of information on Option strategies.
Sign up for our Free newsletter here.
FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Commission Rule 4.41(b)(1)(I) hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Past performance is not necessarily indicative of future results.