I have been trading using the fibonacci retracement in a setup I was told is called an "ambush". Basically it is when price retraces to the 50% line and bounces off. If it breaks the 61.8% it is considered to be a failed setup. The target is simply a -23.6% retracement. Has anyone else used this system? If you have, how did you do and do you have any comments? Here is an old school example:
On a intraday chart, fibs are simply crap. You'll end up getting amushed more than the other way around. Be that as it may, there is some credence on a secular trend like the monthly chart you're displaying above. I concur that 50% retracement works like a charm. The downside is that it doesn't stop exactly at 50% and any overshoot or undershoot, which might not look all that much on the monthly chart, could still be quite a lot on the intraday chart (oh, say, about 20 points on the S&P 500).