Volume distribution, Fibonacci extensions, and Gann angles on one downswing

One downswing, three layers

This case study holds one intermediate downswing on a daily Nasdaq-100 tracking-share chart and records three overlays: a volume-price analysis label, Fibonacci geometry, and a fan of Gann angles.

TradersWeek editorial: treat the work as a lab with a fixed order. First test whether volume is distributing. Then hang Fibonacci retracement and Fibonacci extension shelves on that swing as candidate levels. Only afterward add a proportioned Gann fan so each later touch can be scored as hold, pierce, or failed map. Do not change the swing count to make a later ray look better. That instruction is editorial, not an archive rule.

The confirmed downswing

On the daily Nasdaq-100 tracking-share chart, a zigzag-filter that ignored open-to-open moves smaller than 2 percent kept only the swings large enough to count. The filter marked lower highs at points 1, 3, and 5 and lower lows at points 2 and 4. The case treated that sequence as a downswing: a run of lower highs and lower lows large enough to count as the working trend rather than noise.

A 14-period relative-strength reading on that same downswing reached 23.8 and did not reach zero, even across the drop labeled from point 1 to point 2. The archive records the reading. It does not convert it into an entry rule.

A distribution reading from volume

Volume-price analysis compared peaks, troughs, and the downswing with activity so the swing could be labeled accumulation, distribution, or inconclusive. Volume was compared with a lagged-volume-average built as a 30-day simple moving average minus a second 30-day average begun 15 days later.

Peaks on lighter volume and troughs on heavier volume were presented as a classical distribution reading, treated here as supply entering the market.

Fibonacci shelves on the large swing

Fibonacci geometry was reserved for the large downswing rather than small oscillations. Points 1 and 2 were taken as the 0 percent to 100 percent span of the Fibonacci retracement. A manual −23.6 percent Fibonacci extension was added past the 100 percent end so the map could continue if price kept traveling in the same direction.

On that Fibonacci map, labeled point 3 aligned with 38.2 percent, point 4 with the −23.6 percent extension, and point 5 with 0 percent.

After a pause in policy-rate increases, the case described price as crossing three Fibonacci lines and then stalling at the −61.8 percent extension. Further extensions of −38.2 and −50.0 were also drawn for the continued decline.

Gann angles and the channel

A fan of Gann angles was anchored at the peak with a rise of −2 and a run of 22, under the stated condition that such fans are used on major-to-intermediate swings. The rays were described as holding the decline at point A and lining up with later turns B through D.

A print through 37.5 was described as pointing toward the lower side of a channel whose upper boundary used points 3 and 5 and whose lower boundary used points 2 and 4.