In the financial market analysis, understanding support and resistance levels is crucial. At ONE44, we employ two primary methods to identify these levels: Gann squares and Fibonacci retracements.
Major Gann squares are represented by yellow horizontal lines on the chart, which have historically marked significant market turning points. The second method, Fibonacci retracements, is the focus of this post.
There are basic rules when applying Fibonacci retracements with ONE44’s guidelines. A 38.2% level indicates that the trend remains intact, with new highs or lows expected. A 23.6% level suggests an extremely strong or weak market. A 61.8% level can lead to substantial market swings, maintaining a trading range. Lastly, a 78.6% level may reverse the market by 78.6% of its recent movement, potentially marking the end or beginning of a bull market.We have created 43 videos detailing the use of Fibonacci retracements with ONE44’s rules and guidelines. These videos are valuable resources, applicable across all markets, as the ONE44 principles are universal. They also highlight our belief that Fibonacci retracements form the foundational structure of all markets.
In the latest update on Soybeans (ZSX24 and ZSF25), the market failed to establish a new low after breaking from the 23.
6% level at 1055.00. However, it did close below 981.00, only to rebound above it, suggesting a potential base for the next bull run. The rally has reached the 38.2% level, returning to the 9/30/24 high at 1007.00, a key level for the upcoming week. We use 1007.00 as the swing point for the week, monitoring all retracements to gauge market strength or weakness, irrespective of long-term targets.The rally above 78.6% (981.00) could have initiated a 78.6% move in the opposite direction, but it was halted by a 38.2% retracement at 1007.00, leading to a new low and three closes below the 984.00 major Gann square. The market has not yet surpassed the 8/16/24 low, keeping the possibility of a long-term bottom. The 38.2% level above will be the first test on any rally at 1005.00. We use 984.00 as the swing point for the week.
Above this level, the short-term target is a 38.2% return to the 9/30/24 high at 1005.00. The long-term target is a 78.6% move to 1047.50. The long-term swing point remains at 1116.00, which is a 38.2% retracement to the contract high. Below this level, we watch for major Gann squares at 936.00, 892.25, and 849.75 for support and use them as swing points when closed below.
ONE44 Analytics provides concise and to-the-point analysis.
Our goal is to offer actionable information and explain the rationale behind our predictions based on pure price analysis with Fibonacci retracements and Gann squares, which we believe underpin all markets. If you appreciate this type of analysis and trade in Grain/Livestock futures, consider becoming a Premium Member.Discover the power of Fibonacci retracements in conjunction with the ONE44 rules and guidelines. Follow our YouTube channel for more examples and insights. Sign up for our Free newsletter to stay updated on the latest strategies and market trends. FULL RISK DISCLOSURE: Futures trading is inherently risky and may not be suitable for all investors. There is a significant possibility of losing the entire initial investment or even more. Commission Rule 4.41(b)(1)(I) highlights the limitations of hypothetical or simulated performance results. Unlike actual trading records, these results do not reflect real transactions. The trades have not been executed, which means the results might not accurately account for market factors such as liquidity. Simulated trading programs are generally designed with the benefit of hindsight, and there is no guarantee that any account will achieve similar profits or losses to those displayed. It is important to remember that past performance is not a reliable indicator of future results.
