BULLISH GARTLEY PATTERN IN THE NDX DAILY CHART
The NDX has nearly reached the Potential Reversal Zone of a large Bullish Gartley pattern with a Bullish AB=CD Projection (i.e. - Equal Move Support) completing in the same area. The Potential Reversal Zone is between 1163-1179, which is a pretty small range given the size of the pattern. Here is a chart of these patterns:
ttrader.com
The ideal Gartley is a precise pattern based on fibonacci retracements at .618 of the first leg (labeled XA), .618 of the second leg (AB) and then a 1.618 expansion of the third leg (BC). You can see that the actual pivot prices for the first two .618 retracements have been very close to the precise fib numbers. The ideal Gartley also has point D as a convergence of several "harmonic" price supports, not only from the 1.618 BC expansion, but ideally at a .786 of the XA leg, and a equal move of AB. Here, we have already surpassed the .786XA, but in the many examples of large Gartleys like this that I have seen, the .786 is often exceeded a bit. (Notice that we did get a small bounce last week right at the .786XA.) What we have within this potential reversal zone is the .886XA - (.886 is a little used but still significant fib number, being the square root of .786)
So we have a convergence in the chart of the 1.618BC at 1179, an Equal Move AB=CD at 1169 and the .886XA at 1163.
I know everyone is looking for a retest of the September lows, but in my experience, exact double bottoms are pretty rare on such large timeframes as we are looking at here. Rather, you will more often see a slightly higher low (such as at or near a .886 retracement) or a small break of the lows before a reversal. Based on the harmonic price support that I am seeing right here in the NDX, the chart currently favors a higher low in the 1160-1180 area. That area could be hit as early as tomorrow, or, if we get a bounce first, possibly later this week or early next week.
Phoenix |
