Friday, December 21, 2007

Fib Clusters

Take the fib extension from last month, last week and yesterday. Plot them all on a 1 to 5 minute chart, apply normal system to it and look for fib clusters where monthly, weekly amd daily levels hover together. Consider them higher probablity levels of support and resistance.

Today the mini Nikkei gave an excellent buy signal with this theory. The overnight US session certainly helped with the upward bias, but the levels at which to buy were much clearer with this clustering effect.

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