I often use cluster levels in my trading to identify S&R levels. Usually they involve MP levels with daily, weekly, monthly pivots, and previous day high/low. Here is another way I identify clusters using fib ratios.
The two attached charts go over 2 levels I will watch carefuly for January 21st, 2007. In the below, I have taken Thursdays high and Fridays low; a range of approx 85 dow points. Notice the 50% fib retracement clustered up with the value high pivot. The 620 mark wil be a key level I will be watching.
The second chart below is the same chart showing Fridays action only. I have plotted fib lines from the swing low to the swing high of approx 42pts. (yes this is shy from my 50pt rule) Notice the cluster of the 61.8% retracement and the value low pivot. Another interesting level at 12596 - 12600. This is also a pysch level making it extra key.
