If you’ve spent any time in my world — charts, Fibonacci levels and Market Roadmap lines — you’ve probably heard me talk about measured bounces.
They’re one of my favorite setups in the market because, when they work, they work big. These are corrective moves — not impulsive rallies — and they show up all over the place: equities, indexes, commodities, crypto, you name it.
But there’s a catch…
You’ve got to know what to look for. And if you get it wrong, the market will punish you fast.
Measured Bounce 101
The measured bounce setup starts with an initial move — either up or down — followed by a retrace to the 61.8% Fibonacci level. That’s your trigger. If we glance off the 618 and reverse, the measured bounce is active.
From there, I use a three-point Fibonacci extension tool to project the next leg of the move.
In a bullish case, you’re expecting a move equal to the first leg — an A equals C scenario. Same thing for a bearish case. It’s a one-two-three pattern with symmetry.
That symmetry is key. And here’s the thing…
You don’t need to overthink it. It’s not magic. It’s just math. This is the structure the market follows more often than not — especially when sentiment is muddy and no one knows what’s coming next.
Why This Setup Matters Right Now
I saw measured bounce patterns show up in several spots last week. GameStop (GME) just printed one. So did Domino’s Pizza (DPZ). The S&P 500 is flirting with a bigger one on the daily chart. Even Gold (GLD) pulled off a picture-perfect measured bounce this week.
But these setups only matter if you understand their limitations. A bounce doesn’t mean a trend reversal. It means a corrective push that can offer traders explosive upside — or downside — if the levels hold.
Miss the 618, and the whole setup fails. That’s why I always talk about managing risk around these patterns. You’ve got to know your stop, and you’ve got to know your target.
And when it comes to measured bounces, the targets can be big. We’re not talking about 2% gains here. Some of these moves can run 10% to 20% — or more — in a matter of days or weeks.
Measured bounces aren’t perfect. Nothing in trading is. But when the pattern is clean, the setup is tight, and the market lines up — it’s one of the best tools in my toolkit.
Keep your eye on the 618. That’s the tell.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. See How I Banked a 100% Win Rate on 84 Trades!
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