Cattle's September Rally Started With a 78.6% Fibonacci Retracement and May Have Just Ended With One

Live Cattle

October

(LEV24) 

The chart below is key to this analysis.

There are two methods we use at ONE44 to find support and resistance in ALL markets.

The first are major Gann squares, these are the yellow horizontal lines on the chart. On the chart you can see where the market turned multiple times at these levels.

The second is Fibonacci retracements and this is what most of this post will be about.

There are a few basic rules when using the Fibonacci retracements with the ONE44 rules and guidelines.

This is the short version.

A 38.2% level keeps the trend intact and new highs/lows should follow.

A 23.6% level shows the market is extremely strong, or weak.

A 61.8% level can cause wide swings and keep the market in a trading range.

A 78.6% level can send it 78.6% of where it just came from and even be the end or start of a Bull market.

We have done 43 videos on how to use the Fibonacci retracements with the ONE44 rules and guidelines. These Videos are worth watching even if it is not in the market you are trading, as the ONE44 rules and guidelines are the same for every market. You will also see why we believe the Fibonacci retracements are the underlying structure of ALL markets.

This is the latest.

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The chart below shows how the market held a 78.6% retracement back in April. Each setback held a key level on every setback after that low. First at 61.8% on 5/1/24, the next two held 38.2% on 6/6/24 and 7/9/24 and went on to new highs as would be expected. It then hit 78.6% on 7/25/24, the long term target was 78.6% the other way based on the ONE44 78.6% rule. It fell just short of this target. On the break from 189.00, each of the rallies stayed below 38.2% on 8/15/24 and 8/28/24 keeping the trend negative. 

This leads us to what caused the September rally. The setback from 8/28/24 (38.2%) failed to make a new low and it came in the area of a 78.6% retracement and major Gann square. Following the ONE44 78.6% rule we know this is where a lot of Bull runs start and end. This was indeed what happened. The rally went two major Gann squares higher and hit 78.6% back to the contract high again at 189.00.

What to look for now,

With it hitting 78.6% and closing back below the 187.62 major Gann square, the long term target is 78.6% the other way at 177.10. The short term target is 38.2% at 183.40. A failure to turn lower from 189.00 can send it to the next major Gann square at 193.76.

(LEZ24) 

The December contract also hit 78.6% at 188.00 and the long term target is 78.6% the other way as well. A failure to turn lower from 188.00 can send it to the next major Gann square at 191.86. 

On the chart you can see all the highs and lows where either a Fibonacci retracement, or major Gann square has turned the market and sometimes both. If this doesn't show you that both of these methods should be part of your everyday analysis, I don't know what will.

ONE44 Analytics where the analysis is concise and to the point

Our goal is to not only give you actionable information, but to help you understand why we think this is happening based on pure price analysis with Fibonacci retracements, that we believe are the underlying structure of all markets and Gann squares.

If you like this type of analysis and trade the Grain/Livestock futures you can become a Premium Member.

You can also follow us on YouTube for more examples of how to use the Fibonacci retracements with the ONE44 rules and guidelines.

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