Fibonacci and Gann Applications in Financial Markets

Other Interesting Studies Using Synthetic Ratios 181
Figure 10.8
In the case of the Schatz, this fanline pattern gives some excellent results. Notice
the following:
1. Congestive trading about the first fanline at 23.6% in June followed by a
sharp uncharacteristic to the next fanline support later that month. This is
comparable to the moves seen in traditional fanlines. Looking at the normal
price action of the Schatz contract on this chart, sudden lengthy bars are few
and far between, suggesting that this contract usually takes a gentle approach
to price action. However, this is replaced when the break in a fanline occurs,
just as has been noticed in traditional fanline analysis in earlier chapters.
2. After the June 2003 break the price struggled for some time to move from
the 41.4/44.7% fanlines and the attempt to recover fails.
3. Again a period of consolidation about the 41.4/44.7% area is followed by
quick moves lower again to testing the 52.3% fanline in the July–August
period of 2003.
4. Recovery from the 52.3% retracement level in October fails to see 41.4/
44.7% under any threat and the subsequent move sees 52.3% threatened and
broken again.
The next move will be interesting as although there is little evidence to stop the
contract slipping towards the 71.7% fanline, there is a wide band of consolidation