In the analysis of Fibonacci landscape, the most important level to monitor actually is the 50% line and yet it is the most overlooked one. Just like any sport game, the middle of the playing field normally is the first line of defense and an indication that which side is controlling the game. If it is trading above the middle line we could technically view it as bullish and below as bearish .
Note
Can the middle line predict anything? It depends on your definition of what is prediction. When we see Polar Bear from North Pole attacking the middle line with huge volume it is most likely that the middle line will be penetrated and we can predict that the Polar Bear is in control of the game. At what level the South Africa Bulldog will do the counter attack? We don't know. But the price will tell us when it is in control of the playing field (above middle line). If an expert geologist detected a big 6.0 strong thermal shock, she will predict that it will be followed by many more smaller scaled after shock and the after shock will weaken a high rise building if the foundation is weak or it is not designed as an earthquake resistance structure. Rather then using Fibonacci landscape to fortune telling, it will be more productive if it is used as a seismometer.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.