Here's another example of the market making a sharp down move and later retraces back up to the 38% Fibonacci Retracement. This tells us the market is not super weak. Super weak markets make lower lows after a pause without first retracing to a Fib level.

Starting from the left of the chart the market double topped which was a sign of a downtrend. It then broke lower and made new lows, retraced up 50% of the drop and then slowly fell lower. It retraced back up again and made a sharp drop. It again retraced back up. Notice after all of the drops it retraced back up some of the down move.

Because of this slow and orderly drop and because after we draw our Fibonacci levels the market retraces back to the 38% Fib we want to buy at the FIRST 1.382 Fibonacci Target. Also, buying after the THIRD wave down adds to the probability as Elliot Wavers Look at this as an intermediate low.

We buy here and the market slowly rallies up 22 pips



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