P1: PIC/PIC c04
August 18, 2008
Printer: Yet to come
Beyond Fib Retracements
FIGURE 4.8 External Alternate Price Projections
The 100% APPs by themselves are not enough for high-confidence price targets. Other price projections should fall near them to create a relatively narrow-range zone with two or more of the key projections near each other. Figure 4.9 is the same ES 60-minute data with different alternate price projections. On this chart, I’ve measured the range from the 0 pivot high to the 3 low, proportioned it by 38.2% and 61.8% and projected from the 4 high. The two projections shown on the chart are the result. These two APPs can also be described as the 38.2% and 61.8% APPs of the range of waves 1 through 3, projected from the Wave-4 extreme. A trend Wave-5 is often made at or very near one of these two APPs. Figure 4.10 includes both sets of projections shown on the previous two charts. The 100% APP of 0–1 from 4 and the 61.8% APP of 0–3 from 4 are only one point apart, which is why the labels overlap each other and are difficult to read. The narrow-range price zone where these two projections coincide, at 1404.50–1405.50, is a high probability price zone for the next pivot low and potentially to complete the bear trend. Figure 4.11 is the EUR/USD 15-minute data and shows another use for alternate price projections. Corrections within a trend are often very similar in price range. The chart shows the 100% APPs of the A–B and C–D corrections projected from the E pivot high. The prior two corrections were similar in price so the two 100% APPs made a relatively narrow-range target for another minor correction. The next minor corrective low was made right in the target range and the EUR/USD then continued to a new high.