Precomputed price-ratio clusters and double-top tests

Time, price, and pattern

Analysis is framed as three market dimensions: time, price, and pattern. The price relationships are computed ahead of the next test so candidate support and resistance zones are known in advance.

Three precomputable price methods

Three precomputable price methods are specified. A cycleRatioDivision is a price level found by splitting a completed swing or cycle by a fixed ratio set before the next move arrives. That family includes Fibonacci retracements. Swing-to-swing dynamic ratios include a swingMultiple, a ratio that relates the length of the current swing to one or more earlier swings of similar degree. A percentChangeComparison checks one swing's percentage move against the next swing's percentage move, including cases where the second percent is a Fibonacci fraction of the first.

Any one method may mark temporary support or resistance. A coincidence among methods is treated as a more important objective. That overlap is a priceObjectiveCluster: a narrow band where two or more independently calculated price relationships land together and are treated as a higher-priority support or resistance test.

The watched retracement set

The Fibonacci cycle-ratio set given for retracements is 0.382, 0.5, and 0.618. That dynamicRatioSet is applied to cycle length, swing length, or percent change. A ratioRetracement is the size of a countertrend swing expressed as a fraction of the preceding trend swing. These divisions are to be watched on hourly, daily, weekly, and monthly charts even though markets are not said to respect every division every time.

A weekly bond cluster at the April low

In the weekly bond example, a 21% advance from the 16 August 1988 low at 83.23 to a calculated 101.07, printed high 101.09 on 1 August 1989, was followed by a 13% decline targeting 88.04, with 13 stated as 61.8% of 21. The April 1990 low printed at 88.07.

The 27 April 1990 low is presented as a priceObjectiveCluster of a 50% retracement of the October 1987 to August 1989 advance, a 62% swing-ratio of consecutive declining swings, and the 13-to-21 percentage-change relationship.

A double-top test of clustered resistance

The 15 June and 1 August 1990 highs are identified as a double top sitting on a 2.5 swing-ratio of the prior advance and a 62% retracement of the 20 December 1989 to 27 April 1990 decline, with the later high within two ticks of that 62% level. A doubleTopTest uses those two nearby swing highs as pattern confirmation that a clustered resistance band is being probed.

Bear-swing multiples at the September low

The 24 September 1990 low is described as coinciding with three prior bear-swing ratios, including a 1.5 multiple of the 22 March to 27 April 1990 decline and a 1.0 multiple of the 20 December 1989 to 13 March 1990 decline.

Recalculate, then wait for time and pattern

Price relationships are to be recalculated whenever a high or low is suspected, but a decision is not to rest on price alone. Coincidental price zones are to be read together with time and pattern.