ONE44 Fibonacci Chart of the WeekJPM
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.
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 usingthe 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 breakfrom 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.
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To get a greater understanding of the Fibonacci retracements, take a look at our Youtube video on the Intro to Fibonacci retracements, or go tohttp://www.one44analytics.comfor all the rules/guidelines and examples of them.
The video can be found here,