How to Trade the Highest-Probability Opportunities: Price Gaps by Jeffrey Kennedy

Author:Jeffrey Kennedy [Jeffrey Kennedy]
Language: eng
Format: epub
Publisher: New Classics Library Inc
Published: 2008-06-24T16:00:00+00:00

Figure 4-13

Time and time again, you will see that these Fibonacci levels spark reversals in the market. Figure 4-13 displays a clear hard gap on Silver’s weekly price chart. The decisive penetration of the break out level at 15.73 (short dark blue line) tells you that the price gap is neither an exhaustion gap nor a common gap and that the move will continue.

Figure 4-14

Where’s the Silver market going to go? After completing a Fibonacci gap analysis of two price bars, you know that it’s going to go to one of three levels.As you can see in Figure 4-14, the market easily surpasses the 1.618 multiple, decisively penetrates the 2.618 multiple, travelsright to the 4.236 multiple at 20.87, and subsequently tanks.

Figure 4-15

Now, let’s similarly analyze Wheat’s price chart. Here’s the chart with four hard gaps marked by the arrows.

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