Fibonacci and W. D. Gann

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 and Gann squares.

You can get all the rules and guidelines to the Fibonacci retracements on our website.

(ESU21)

After seeing where the last 3 lows were, what can we say other than, you have to watch the Fibonacci retracements and major Gann squares!

As for trend following, we know of no better tool to use than the Fibonacci retracements. When using the ONE44 rules and guidelines, you know that in order for the trend to stay positive it must hold 38.2% and markets that are extremely positive will only retrace 23.6%.

The last 3 setbacks in the market held the key retracements. On 5/13/21 it held 38.2% back to the 3/4/21 low and then went on to new highs. The next low on 6/21/21 held 23.6% back to the same low. The last low came into a cluster of retracements from the previous three lows. They were 38.2% to the 5/13/21 low, 23.6% to the 3/4/21 low and 61.8% back to the 6/21/21 low. All of these are marked on the chart below.

Looking at the Gann squares (on chart) the 5/13/21 low held the 4030.00 major Gann square, the rally from there took it two major Gann squares higher at 4266.00. The break from there went one major square back at 4146.00.  The next rally from it went up two major squares at 4386.00, this was also a cluster of major Gann squares. The break from there went down to the 4266.00 major Gann square, it did have one close below it and this is acceptable, it also went into the cluster of retracements. This also led to new ATH's.

Currently,

Our short term swing point is the 4386.00 major Gann square cluster. The next cluster of major Gann squares is much higher, so for now, above 4386.00 look for the 4510.00 major Gann square. With a solid close below 4386.00 the first longer term target would be two major Gann squares lower at 4146.00, this is also 23.6% back to the 9/24/20 low.