Fibonacci & Pivot Clusters

[Soultrader 12]

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.

 

[TinGull 10]

Cool stuff James. One question, why didn't you take the fib to the 635 area from the low to that swing high? Was it because it happened before the new high that you put your fibs to?

 

Also, that 600 level...spent a lot of time there yesterday:

 

 

Should be interesting.

[Soultrader 12]

Sure Tin.. fibs can be drawn from that 635 high to the swing low. Below shows the chart with the fibs applied. Notice the 50% retracement and PP cluster zone. The only problem with all these lines on my chart is that it really distorts my trading judgement. I prefer to keep things simple as possible and because the PP is pretty much the midpoint of VAL and VAH, I dont place too much emphasis on it. Initially I expect price to travel from VAL to VAH. However, if I do see price respecting the PP... I may take that as a breakout signal out of value.

 

[TinGull 10]

Cool Soul,

 

Thanks