Ichimoku Kinko Clouds

Key to this is the idea of special numbers. Not lucky ones as 7, or unlucky 13, but ones which, from number crunching, are considered significant. We are not going into the realms of mysticism here, as those of you who are aficionados of Fibonacci retracements and projections will understand. Proportions of 0.61875 and 0.38125 are also special, but not magical (although some do believe 1.618 is divine). The Timespan Principle has three simple numbers: 9, 17 and 26 (remember, 9 and 26 are the days used for the moving averages) and are considered the most useful. • 9 is known as the ‘basic unit’ • 17 (9+9-1) is two of these basis units (the –1 is explained later) • 26 is three basic units (9+9+9-1), or one ‘term unit’. The next set of numbers are compound ones, arrived at through rough combinations of the first three. These are: • 33 (one term unit plus one basic unit), 26+9-1 • 42 (one term unit plus seventeen), 26+17-1 • 65 (is known as one ‘super big unit’, 33+33-1 • 76,

From the N Wave consolidation patterns, Price Targets are determined. Again, this should be straight-forward, as it uses measurements of the size of the whole pattern and the size of each of the waves within it.As inWestern technical analysis, the height of the triangle gives a target price for when we break out of the pattern. Similarly a head-and-shoulders pattern gives a price target and ElliottWave theory states that wave C will be in proportion to wave A lower. Ichimoku targets can only cope with the size of the very next little wave. Each consolidation pattern suggests the direction of the very next move only. It does not predict the next series of waves and long term targets as ElliottWave can do. So, one step at a time here. The Price Targets are labelled V, N, E, and NT. The first two are self-evident - being the final leg of their respective formations. E may have stemmed from the fact the pattern has two equal halves, where the last leg compensates for the dip to C, but

First, let’s look at the consolidation patterns of theWave Principle. Although there are many variations of these, they all have the same basic precepts: price ranges and wave counts, with wave sizes in proportion to each other; breakout price projections based on the sizes of the waves and the consolidation patterns. In other words, consolidation patterns can be sub-divided into a series of small waves and the size of the pattern determines the extent of the wave that follows on a break-out of the formation. Starting with the simplest wave called an “I”: a market that will either go up in a straight line or down equally steadily, often one wave following the other. Putting these two together one ends up with pattern “V”, the second simplest one, which may start with an up move which then reverses, or vice versa. Things get a little more interesting with “N”, which is a three-wave alternating combination either moving up first or down first. Then we have five wav