Fibonacci Resistance on FOMC Day
- Posted by JC Parets
- on June 20th, 2012
We’re talking about the two month sell-off from April to June. It was like a magnet. That 61.8% Fibonacci retracement was tested for the first time Tuesday and backed off. I get the feeling the low 1360s could be trouble this week.
And it’s not just these Fibonacci numbers. The reason this level really matters to me is because it also served as key support throughout April and then resistance briefly in early May. This is the first time we’re back to this point and I find it hard to believe we break through there right away without any problems.
Now, can Uncle Ben come out and say something that will make the markets rally and completely ignore these aforementioned levels? Sure. But the more realistic outcome is that a lot of what he may say is priced in and we could see a temporary ‘sell the news’ type action. I’m certainly hoping for that because I don’t own enough of my favorite stocks and I’d like to add to long positions on any dip.
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J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
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