Fibonacci and Gann Applications in Financial Markets

Other Applications of the Fibonacci Retracements and Extension 37
Figure 3.8
development of the price, even after the successful penetration of the 61.8% support
level in July 2003 (see Figure 3.8).
In this example of the Dow (Jones Industrial Average) the recovery in the index
has seen key levels under attack within the pattern. Again the arcs are good indicators
of target and objective and notice that the pullback from the 50% arc in May
2003 did not go as far as the 38.2% arc, which should draw attention to the average
starting to bounce higher once again. The break of the 50% arc comes after a short
period of consolidation and sideways action, but once that happens then the 61.8%
arc is seen as objective (see Figure 3.9).
Figure 3.9