s&p fibbonacci retracement

[jamesj188]

hey mate, if you were to plot fibbonacci retracement on the spy, for the bull run from july/aug to apr/may what prices would be the top and the bottom for the retracement?

my guess is 105 to 137. what would you guys say?????????????

thx

 

[jamesj188]

i know its quite technical but its important for my strategy,...

 

[Pazienza]

Post a chart with your interpretation, then people can comment on it.

 

[jamesj188]

good idea. here is the chart (spy).
guys, please let me know from which point to which point you would draw the retracement.
My guess is point 2 to 3. some might say otherwise....???

 

[Pazienza]

good idea. here is the chart (spy).
guys, please let me know from which point to which point you would draw the retracement.
My guess is point 2 to 3. some might say otherwise....???

Hi James,

There is no right answer. 2 to 3 is fine, as is 1 to 4, or some other combination of these.

You could also have one from the dip by the 61.8 line you have marked to 3 (or indeed 4).

Some people like to layer them to produce what they call fib confluence (which you could do here). So for example, you chuck two fibs on, and see you've got an overlap between the 50 of one and the 61 of another, or whatever. I think this was popularised by a thread on FF and subsequent spin-off members' site. I can't say I'm a fan of that as I can't see much point in it, but if you like fibs I'd imagine that approach has its appeal.

It really comes down to interpretation. I don't use fibs, and to be honest even if you do like them you can just eyeball it really without putting the lines on (like MACD divergence). But as a general rule of thumb draw it in the most obvious places for the timeframe you're looking at. In this case, probably 1 and 4.

Hope that helps.

 

[jamesj188]

thats a great point on the confluency. thx