Another potential “Short” in a Low % Support Zone. Price opens in
Zone 3 and this designation forecasts support in Zone 3 to be only 36%. So,
we may expect support of this Zone to fail 64% of the time.
What technical tools support a breakout to the downside?
A) HiLo Activator (OWN 5 periods) is above price bars since previous day,
pressure down.
B) By using Relative Trend IndZ (RSIZE) of the Next time period (DLY) to
define the trend. On the very first 45-minute bar the DLY RSIZE set @ 5
periods slipped below it’s Zero Line, showing that the DLY Trend has
turned Down.
So, if you sold the market, you would be acting in the same direction
as the Next time frame’s trend.
If you use the 45-minute bars to trade then one could use the Daily
to define the trend. But, if you are trading the 15-minute or Lower, then
the Daily Trend would be too far from a very low time frame to be of
immediate use.
On the other hand, the 45, 50, 60, 78-minute, etc. time frames can
utilize the Daily (next time frame) trend direction.
C) DTI. DIF. - OWN @ 21-13-2.618
The DTI Differential is clearly below its Zero Line. And in fact, the last 2-
45-minute histoboxes from the previous day was already below the Zero
Line and the price bars were red.
If you plot the regular DTI (OWN) @ 21-13-2.618 for this chart, you
can easily see that the DTI. DIF. is quick reference that mirrors the regular
DTI’s information in a simple way.
At the end of the day prices closed in Zone 1 and it was a clean shot
down.
CHART 6 PDLI (NASDAQ) 78-MIN/DLY/WKL (Protein Design Labs, Inc.)
A bonus chart: CL6-OP4 combination
Yes, we can now analyze Stocks for Fibonacci Zone probabilities. The
implications are interesting. This is a first.
In this setup, the Highest % Resistance Zone was Zone 5 @ 59% that
could be Reached 60% of the time. In spite of the 78-minute bars rising,
Zone 5 stopped it and the Fibonacci Resistance band 1 held.
So, if you were Long from the previous day (3/21/2002) you may consider
taking some off the table.
This stock fell from 84.50 to 12.75 and is currently at about 17.13. One
could say the trend was down.
Let’s check some of our technical tools:
1) HiLo Activator (OWN 5 period)
A flip occurred on Bar 2 and followed prices up until Bar 10 closed below
the HiLo.
2) RSIZE OWN - 13 Periods (78-min)
This colors the bars. From Bar 2 this indicator was above the Zero Line
and the bars were Green.
3) ECO - OWN - 2.618
Here is our old friend the ECO. If the stock you are tracking on a 78-
minute basis is slower than this PDLI, then check it out at 5 or 8 or even
13 periods.
Note: even before the bars turned Green on the 21st, the last 2 bars of
the previous day caused the dots to jump below the Histoboxes =
Warning?
4) DTI Differential OWN: 21-13-2.618
Entire day of the 22nd and 23rd, the Histoboxes above it’s Zero Line.
But, note boxes sloping upward on the 20th and sloping down on the
22nd.
This extended Journal should give you a reasonable starting point to
investigate the Fibonacci High Probability Zones™ and a few possible routes
to incorporate these concepts into your own trading plan.
Check out the indicators and tools discussed. Fibonacci Trader Journal
2 will check further into these Fibonacci Zones. So will the book I am writing
with John Jackson called “High Probability Fibonacci Zones™” due to be
published in the autumn.
TECHNICAL INFORMATION
We have made access to the Daily data needed as simple as possible.
The data is provided by Pinnacle Data Corporation for commodities. This
comes with the program. This is reverse adjusted. For stocks you can
download from TC2000 if you have it. This does not come with the program.
If you want to use other data vendor’s data, it is pretty simple. Read the
HELP file carefully. Be aware that the percentages shown in the Probability
Matrix is based on Reverse Adjusted data from Pinnacle Data Corporation.
As it looks at 2525 days and it updates once a month. The percentages
referred to here can change slightly, but it will not affect the concept.
Also note that data from different data vendors are not identical. What
is important is that you use daily data from one data vendor and stick with that
one. That way you will get consistency. You may want to subscribe to daily
updates, it is pretty inexpensive.
We make no commission from any data vendor we use or recommend.
Note: over a 10-year period, the statistics stay pretty constant, so the above
comment is just to let you know what can happen.
INFORMATION
We recommend minimum 5-10 years of Daily data for accurate statistical
analysis that the Fibonacci Zones require.
Instruments that have been trading for a short time can give unreliable
information.
Go to Beginning >>> Trend Finder
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