Last night's prediction was right on. See last post.
Notes for Wednesday:
- If price gets that high, expect resistance at 922 (Gann level) to 923.50 (5/20 high), then 936.25 (1.272 fib extension of last move down, see Chart #2). However, I feel 914 area might be it. See chart #1 and #2 below.
- Take note of the larger 50% retracement at 895.50 (target of 922.75).
- Support: 24H PP at 898.75. PIT PP at 888.25.
CHART #1: Below is a daily chart of the ES and I'm looking at the two movements/waves indicated by the blue arrows. As you can see, this latest wave is 0.786 or 78.6% of the last wave (fib level). The flip side of this is if our current wave extended higher than the last wave. See Chart #2 below.
CHART #2: If we extended higher than the last wave, the level we would look at would be 1.272 or 127.2% of the last wave. That chart would look something like the one below. Nothing in trading is 100%, but this type of ratio happens over and over in the market, so it pays to be prepared. See Chart #3 below for another example.
CHART #3: To illustrate this fib ratio even further, below is another daily chart, showing the last two waves and their their relationship. You can see that the right, blue arrow is 127.2% of the left, blue arrow... pretty much to the tick!
CHART #4: We are currently range bound as dictated by those last pivot highs (see arrows).
Homework, Lesson