**TD ARCS**

*Developed and trade marked by Tom DeMark, TD Arcs combine a
percentage retracement with the time period.*

**Downtrend (Upside Arc)**
- Connect the most recent low to the previous highest peak.
- Draw the Fibonacci retracement levels (38.2% and 61.8%) on this line,
pivoting at the recent low price

**Uptrend (Downside Arc)**

- Connect recent high to previous lowest low
- Draw the Fibonacci retracement levels on this line, pivoting at the
recent high price

**Interpretation **

- Find the highest high (A) between the current low (B) and the last time
the price exceeded this low, draw a line connecting A and B.
- Mark the .382 and .618 Fibonacci percentage reversal figures on this
line and swing forward. TD Arcs are the retracement levels marked on the
straight line
- A time filter is used to test the retracement strength.

**Signals **

If the price retraces 38 percentage points of the previous move
in **less** than 38% of the period that generated the last move, the price
has a greater chance of retracing further to the 62% level.

The key to TD Arcs is the **speed** with which the first
retracement level is reached and broken (or not) by the price. If the 38% level
is reached and broken before the 38% Arc, there's a strong tendency for the
momentum to carry the price up through the next retracement level at 62%. As the
example above demonstrates, however, if this doesn't occur quickly enough
(before the price reaches the 38% Arc) the momentum tends to lag, the
retracement becomes exhausted, and the market once again follows the overall
long-term trend.

**Further Information **

*See also Fibonacci arcs.*