Ichimoku Charting and Analysis
The new lookback periods are now 36 to 104 to 208. Again, the ratio of the
lookback periods is preserved. In this case the ratio of the lookback periods may
be reduced to 9 to 26 to 52 by dividing across the ratios by MF.
Notice that to analyze and track smaller wave cycles or higher harmonics via
Ichimoku charting, we set the Senkou Span B to the new underlying cycle period.
For analysis of larger wave cycles or lower harmonics, we set the Kijun‐sen to the
new underlying cycle period instead.16.5 Basic Ichimoku Price‐Projection Techniques
Ichimoku cloud analysis also allows for the determination of minimum price ob-
jectives. This is done using price projections based on price patterns. A few basic
Ichimoku‐based price patterns are displayed in Figure 16.26.
Minimum price objectives are just 1‐to‐1 ratio expansions of the height of the
pattern. For the V‐pattern expansions, see Figure 16.27.
For the N‐pattern expansions, see Figure 16.28.
The Ichimoku V patterns are not unlike the Western V‐Top/Bottom forma-
tions. The Ichimoku N patterns are essentially identical to the A‐B‐C‐D pattern,
also referred to as the measured move. Similar patterns and their price expansions
and projections have been dealt with in detail in Chapter 13.16.6 Chapter Summary
We have seen that Ichimoku charting is more than just a simple set of moving av-
erages on a daily Japanese candlestick chart. The lookback periods of its overlays
are based on the monthly cycle in the commodity markets. Each overlay tracks
a specific monthly cycle harmonic, capturing the behavioral nuances of market
action. It then uses this as a basis for projecting potential support and resistance
levels for subsequent monthly cycles.FIgure 16.28 Ichimoku‐Based Price Projections for the N Pattern.