redbacka's - reinin' in the buyin' - wednesday, page-78

Hey Chris, no the points being the points you used for your retrace. Sorry I haven't had a chance to look beyond that so I can't really give you an opinion. If I can get a chance the next day or two then I'll have a look.

I've done a basic retrace chart of XJO, just 3 simple points. When fib levels converge on each other they form clusters (3 or more levels within a tight range). These often have greater impact. Anyway, three basic scales and you can see how they have been effective.

I'll teach you all a very cool simple little trick also, it's called an FSS 50 extension. Elliott also uses the strategy. If you take a standard retrace, apply zero to the high of a trend. Now look for the low of the first impulse reversal within that trend, most often it's a three wave corrective. Once you've identified the correct wave, manipulate the retrace so the 50% level matches the impulse low, the 100% then becomes your target. It's basically 200% of A. The method has freaky accuracy, you'll see it work all over the place and applying this method to the GFC decline around June/July 2008 on JO would get you looking for a low around 3220.