Price Forecast - Support / Resistance

Cycles frequently top and bottom at support/resistance levels. We use the Fibonnaci ratios to help confirm cycle retracement and determine price objectives. Additionally, the price movement of one cycle can often forecast the approximate price level of the next cycle in a calculation called the Mid-Cycle Pause (MCP).


Fibonnaci Retracement
Cycles are based on time. Within the cycle time frame, support and resistance levels frequently coincide with cycle tops and bottoms. Fibonacci Retracements provide predictable support/resistance levels that often develop into cycle turning points.

When prices appear to be consolidating or reversing at a Fibonacci Retracement level, and the Double Stoc oscillator and/or HAL OB/OS indicator is also showing a potential reversal, the market is often making a trading cycle high or low, which should be confirmed by a Mechanical Buy/Sell Signals.

The Fibonnaci Retracements plot as horizontal dotted lines in the price panel. Prices can be turned off to make the chart cleaner.


Fibonnaci and Mid-Cycle Pause Price Forecaster
One of the advantages of identifying cycles is the ability to forecast the approximate time periods and price levels of the next cycle top or bottom. Using the previous trading cycle as a base, the MCP Objective forecasts the most probable price level for the next cycle top or bottom to occur.

But prices do not always reach or stop at the next MCP price objective. Often, prices will stop at a .618% move of the MCP; other times, prices will move well beyond the MCP, reaching a 1.618% move from the previous cycle top or bottom. Prices meeting support or resistance at these price levels when in a HAL OB/OS Band, and as the Double Stoc oscillator is at an extreme, or turning to generate a Mechanical Buy/Sell signal, will frequently indicate a trading cycle is topping or bottoming.

The Fibonnaci and MCP Price Forecaster plots three price objectives in the price panel showing price objectives. The green is a .618 price objective; the blue is a MCP price objective; the purple is a 1.618 price objective.

Next: Trend