Fibonacci ratio retracements

These monthly charts provide a demonstration of why we include Fibonacci ratios for retracements in our market analysis.


The Dow Jones Industrials retraced .618 from the 1987 crash low of 1706.9 to the Oct. 2007 high of 14,198.1 with the March 2009 low of 6,470.0



The S&P 500 had a Great Depression low in June 1932 of 44.0. From that low it then peaked in March 2000 at 1552.87. The Oct. 2002 low was an almost perfect 50 pct. retracement at 768.63.


Soybeans had an Oct. 1969 low of 236 1/8 and an all time high of 1660 in July 2008. The December 2008 low was just a few pennies through the .618 retracement at 777.

These are just a few examples of what makes this such a valuable tool in our opinion. Hopefully you would agree. If you think using these powerful ratios can improve your results wouldn’t it be worth contacting us to see how we might help put them into action for you?

Jeff Majer
Diego Pilar

jmajer@mfglobal.com
dpilar@mfglobal.com

312 261-7380
800321-5810

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Natural Gas Fibonacci

click chart to enlarge

This is an update to the Natural Gas price move we have been covering the past week or so. By now those who have been reading this blog spot have seen our use of Fibonacci retracements and extensions. As can be seen in this daily chart of the November Natural Gas futures the first .618 retracement level of significance has been reached at today’s high (Wed. 9/16/09). It’s still open as we prepare this and could continue to new daily highs, but we have learned through experience the value of these ratios.

This also doesn’t mean that the move is over. It is, though, something traders should not only be aware of but perhaps use as a barometer for adjusting their trading positions. This could mean adjusting quantity or stops. It may mean for some traders that new trade initiation is in order. It could also be to trade against it or to now watch for a new signal if and when the level is penetrated.

Whatever it may be, we felt it notable and important enough to get the word out that this level of significance has been hit.


Happy trading

Jeff and Diego

CB&S
Division of MF Global Inc.

jmajer@mfglobal.com
dpilar@mfglobal.com

312 261-7380
800 321-5810
www.cbandsbrokerage.com

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.