YMZ1, Stretch and Fibonacci of Stretch, 1.618% and 2.618% reversals
Hi,
YMZ1 price action summary up to the last hour of trading: Unchanged + 2.618% Stretch, -2.618% Stretch, -Stretch (once more), +2.618% Stretch, and is now trading around one Stretch calculation lower than that +2.618% Stretch bounce off the low, 12054. Going into the last hour equity indicies tend to print price reversals that are close to the Stretch calculation respective of their previous extenstion, i.e., not necessarily from unchanged. Here are the numbers below.
YMZ1 (December $5 Dow futures) intra-day price rotations basis the Stretch calculations (Stretch = 49), (1.618% Stretch = 79), (2.618% Stretch = 128), and (4.25% Stretch = 208). Unchanged + 2.618% Stretch = 12112 + 128 = 12240 (12240 = four points below the high, 12244). 2.618% Stretch price moves almost always reverse, and this 2.618% Stretch printed a benchmark high, then failed to find new buyers. 12240 - 128 = 12112 (unchanged). From unchanged YMZ1 price action declined by the Stretch, 12112 - 49 = 12063, and printed a double bottom (5 and 15 minute bars) low, 12054, and reversed +2.618% Stretch (actually one point more than 2.618% Stretch before reversing lower) ... 12054 + 129 = 12183. From 12183 prices have declined 65 points to 12118 (12:02PDT) going into the last 79 minutes of trading.
YMZ1 price action summary up to the last hour of trading: Unchanged + 2.618% Stretch, -2.618% Stretch, -Stretch (once more), +2.618% Stretch, and is now trading around one Stretch calculation lower than that +2.618% Stretch bounce off the low, 12054. Going into the last hour equity indicies tend to print price reversals that are close to the Stretch calculation respective of their previous extenstion, i.e., not necessarily from unchanged. Here are the numbers below.
YMZ1 (December $5 Dow futures) intra-day price rotations basis the Stretch calculations (Stretch = 49), (1.618% Stretch = 79), (2.618% Stretch = 128), and (4.25% Stretch = 208). Unchanged + 2.618% Stretch = 12112 + 128 = 12240 (12240 = four points below the high, 12244). 2.618% Stretch price moves almost always reverse, and this 2.618% Stretch printed a benchmark high, then failed to find new buyers. 12240 - 128 = 12112 (unchanged). From unchanged YMZ1 price action declined by the Stretch, 12112 - 49 = 12063, and printed a double bottom (5 and 15 minute bars) low, 12054, and reversed +2.618% Stretch (actually one point more than 2.618% Stretch before reversing lower) ... 12054 + 129 = 12183. From 12183 prices have declined 65 points to 12118 (12:02PDT) going into the last 79 minutes of trading.
... adding to the last hour rally from 12118 (from the low, 12054 to 12183 = 129 pts and 2.618% Stretch = 128 pts), ... the pullback to 12118 was 69 points, a 64% correction, which reversed higher to print another 2.618% Stretch price move... 12118 + 133 = 12251 (7 December high = 12251). The 7 December trding range was 197 points. 4.25% Stretch = 208 pts. The first 2.618% Stretch price move from unchanged projected 12240, and reversed lower from 12244.
The 2.618% Stretch price moves basis the December $5 Dow futures continue to project price target reversals.
Namaste
The 2.618% Stretch price moves basis the December $5 Dow futures continue to project price target reversals.
Namaste
Hunter,
You've taken the time to try explaining your method, but I have a few questions.
When is the opening for your stretch? 9:30 EST
Does your high and low only apply to the day session?
Do you enter outside of day session hours?
How do you determine which direction to trade?
How do you decide with multiplier (0.38, 0.62, 1.62, 2.62 etc) to use?
You've taken the time to try explaining your method, but I have a few questions.
When is the opening for your stretch? 9:30 EST
Does your high and low only apply to the day session?
Do you enter outside of day session hours?
How do you determine which direction to trade?
How do you decide with multiplier (0.38, 0.62, 1.62, 2.62 etc) to use?
HI ETM,
Q: When is the opening for the Stretch?
A: DT calculates the Stretch calculation from the B session opening. I apply the Stretch provided by www.mypivots.com to the previous settlement, i.e, the A session open, i.e, 13:30PDT.
Q: Does high and low only apply to the day session?
A: High and low prices are for the trade date, i.e., A and B session for 8 December, which is today. [Note: At the 13:15PDT settlement the exchanged, www.cmegroup.com, changed the trade date from 8 December to the next A session open, 9 December, which opened fifteen (15) minutes later.]
Q: Do you enter outside day session hours?
A: Asked and answered. (See above.)
Q: How do you determine which direction to trade?
A: Lawn darts. lol I'll try to answer the last two questions with this one answer. The set up attempts to identify the next intra-day counter trend price move. Identify the Stretch calculation as provided by www.mypivots.com, and multiply by the Fibonacci ratios you provided, ... 0.382%, 0.618%, the Stretch, 1.618%, 2.618% and 4.25%. Stop calculating at 4.25% because 4.25% often projects the daily trading range. Back to your question about which direction to trade. Start by identifying intra-day price action as price patterns develop from the A session open, i.e., 0.382% and 0.618% which are also good guidelines for stops, but again, this is subjective because the first price move may print a 1.618% price move away from unchanged (the previous settlement) hit stops and correct by the Stretch only to resume towards a uni-directional day. Recently we've seen alot of uni-directional days... Santa Claus rally, US equities markets prettiest horse in the glue factory, ..." month-end and month-beginning window dressing." This is where higher lows are measured (though it may take you "stop loss offset" in a uni-directional day) as corrections with respect to the previous (immediately previous) 1.618% or 2.618% price move before prices continue along that uni-directional trend.
I tend to apply 0.382% Stretch and 0.618% Stretch to identify early A session price range expansion and to apply as stop loss tools.
ADDITIONAL TECHNIQUE: Measure the previous sessions price rotation (basis a Stretch / Fibonacci of the Stretch) going into the B session close, and apply that measurement to the direction of the first price move in the new A session. Start looking for correlating measurements. Find two or three and your tradeable probabilities increase.
This should give you a better idea how to get your head around this technique that identifies the (3, -1) formula that projects price moves.
Also, as prices move closer to expiration, I've noticed that the (3, -1) formula tends to print less often, but rather the 1.618% and 2.618%, e.g,. 2.618% of the Stretch price rotations tend to produce tradeable probabilities to scalp twenty or more points. Basis $500 intra-day margin for the e-mini $5 Dow futures, twenty points is a 20% price move. Go to the bottom of the www.mypivots.com Home Page and click the "millionaire calculator," and apply 20 points to the self-imposed $2,000 at $5 per point.
So much for a "Quick Reply."
Namaste
Q: When is the opening for the Stretch?
A: DT calculates the Stretch calculation from the B session opening. I apply the Stretch provided by www.mypivots.com to the previous settlement, i.e, the A session open, i.e, 13:30PDT.
Q: Does high and low only apply to the day session?
A: High and low prices are for the trade date, i.e., A and B session for 8 December, which is today. [Note: At the 13:15PDT settlement the exchanged, www.cmegroup.com, changed the trade date from 8 December to the next A session open, 9 December, which opened fifteen (15) minutes later.]
Q: Do you enter outside day session hours?
A: Asked and answered. (See above.)
Q: How do you determine which direction to trade?
A: Lawn darts. lol I'll try to answer the last two questions with this one answer. The set up attempts to identify the next intra-day counter trend price move. Identify the Stretch calculation as provided by www.mypivots.com, and multiply by the Fibonacci ratios you provided, ... 0.382%, 0.618%, the Stretch, 1.618%, 2.618% and 4.25%. Stop calculating at 4.25% because 4.25% often projects the daily trading range. Back to your question about which direction to trade. Start by identifying intra-day price action as price patterns develop from the A session open, i.e., 0.382% and 0.618% which are also good guidelines for stops, but again, this is subjective because the first price move may print a 1.618% price move away from unchanged (the previous settlement) hit stops and correct by the Stretch only to resume towards a uni-directional day. Recently we've seen alot of uni-directional days... Santa Claus rally, US equities markets prettiest horse in the glue factory, ..." month-end and month-beginning window dressing." This is where higher lows are measured (though it may take you "stop loss offset" in a uni-directional day) as corrections with respect to the previous (immediately previous) 1.618% or 2.618% price move before prices continue along that uni-directional trend.
I tend to apply 0.382% Stretch and 0.618% Stretch to identify early A session price range expansion and to apply as stop loss tools.
ADDITIONAL TECHNIQUE: Measure the previous sessions price rotation (basis a Stretch / Fibonacci of the Stretch) going into the B session close, and apply that measurement to the direction of the first price move in the new A session. Start looking for correlating measurements. Find two or three and your tradeable probabilities increase.
This should give you a better idea how to get your head around this technique that identifies the (3, -1) formula that projects price moves.
Also, as prices move closer to expiration, I've noticed that the (3, -1) formula tends to print less often, but rather the 1.618% and 2.618%, e.g,. 2.618% of the Stretch price rotations tend to produce tradeable probabilities to scalp twenty or more points. Basis $500 intra-day margin for the e-mini $5 Dow futures, twenty points is a 20% price move. Go to the bottom of the www.mypivots.com Home Page and click the "millionaire calculator," and apply 20 points to the self-imposed $2,000 at $5 per point.
So much for a "Quick Reply."
Namaste
HI ETM,
Did you identify the tradeable opportunity to fade the first Stretch above unchanged in the A session, unchanged + 56 = 12012 + 56 = 12068? That first high was 12073. The first decline corrected at 11977, .e., -96 points (1.618% Stretch = 90 points), and then bounced 88 points to 12065. That resistance level was a good place to sell previously (strong selling in the previous session) and prices declined, again, to test and support at the previous day's (8 December) low, 11957. 12068 - 56 = unchanged - 56 = 11956. I was short at 12065 and covered at 11966 for a +99% profit basis $500 intra-day margin. Each tick = $5 and a twenty point move = 20% basis the e-mini $5 Dow futures.
Price rotations:
X = Stretch
1.618% Stretch = 90
2.618% Stretch = 146
4.25% Stretch = 238
Unchanged + 61 points (X), -96 points (-1.618%), +88 points (+1.618%), -108 points (-1.618% testing previous day's low), +114 points (+1.618% bouncing off 8 December low), -50 points (-X), +109 points (+1.618% at 03:57PDT), -104 points (-1.618% at 06:08PDT).
Did you identify the tradeable opportunity to fade the first Stretch above unchanged in the A session, unchanged + 56 = 12012 + 56 = 12068? That first high was 12073. The first decline corrected at 11977, .e., -96 points (1.618% Stretch = 90 points), and then bounced 88 points to 12065. That resistance level was a good place to sell previously (strong selling in the previous session) and prices declined, again, to test and support at the previous day's (8 December) low, 11957. 12068 - 56 = unchanged - 56 = 11956. I was short at 12065 and covered at 11966 for a +99% profit basis $500 intra-day margin. Each tick = $5 and a twenty point move = 20% basis the e-mini $5 Dow futures.
Price rotations:
X = Stretch
1.618% Stretch = 90
2.618% Stretch = 146
4.25% Stretch = 238
Unchanged + 61 points (X), -96 points (-1.618%), +88 points (+1.618%), -108 points (-1.618% testing previous day's low), +114 points (+1.618% bouncing off 8 December low), -50 points (-X), +109 points (+1.618% at 03:57PDT), -104 points (-1.618% at 06:08PDT).
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