Some Essential Principles and Guidelines:
1. Retracement to the 19.1/80.9 on a swing mainly heads for elongated target #1
2. If a daily bar closes bearish, price will most likely retrace to the short level of that bar and continue to its targets. Occasionally retracement may deepen to long/resistance amounts. Vice versa for bullish closing bars.
3. If price reaches a target and neglects to shut beyond, this could indie the end of the move and the beginning of a reversal or retracement.
4. If price shuts past objectives, this could imply targets will be used for support/resistance for continuation.
5. The places on the fib will be the support and resistance levels.
6. Most times when price reaches an elongated target the market reverses or gives a strong retrace.
7. Consistently fib the swing that began the current move and also the major price bar (if any) in the bottom/top of the move to get a good estimate of where price is headed. Example below...
Figure A - shows that the swing on which price purchased
Figure B - shows that the major price bar in the base of the move. How tightly the price targets converge? Look at price reaction.
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