Here's the daily chart of the Emini YM Dow Jones Industrial average March futures on March 1st 12:00pm ET. We're already well past the 127.2% Fibonacci level, so the next Fib based target is 161.8% which I have as 21,250. The next Fib target would be 200% which is 22,080.
However, we'll be changing the front month from March to June next week on March 9th. If we get more strong moves to the upside we could hit the 161.8% before then. If not, I'll just draw the Fibs on the June chart.
If we do hit the 161.8% Fib I'll be looking for a reversal pattern to short. Not saying I'm predicting one, but I'll be on the look out for one.
I've been using the 127.2% Fib as a target on YM intraday scalping trades on continuation patterns and its been working very well. It works a lot better on stronger volume than on weaker. I've been using 500 contracts/minute as a minimum for a 21 period SMA on the 1 minute volume chart. I made a rule for myself that I should only enter a trade if the current 1 minute chart volume SMA(21) is greater than or equal to 500. When I break that rule due to a beautiful pattern, I'm usually disappointed and a little poorer.
