S&P500 Fibonacci Retracement Levels

When trendlines are broken in markets, Fibonacci analysis gives us levels to watch for potential turning points. Last month we wrote about how the S&P500 was testing the key trendline for the rally off the June lows. Now that we’re clearly broken, here are some level we’re watching (click chart to embiggen):

I think that the mess of up and downs in the market during late June and July should serve as a cushion for this market sell-off. I say ‘should’ because we don’t bottom-fish. We wait for evidence of buyers to come in before making any decisions. No blind knife-catching allowed where I come from.

1346 represents the 61.8% Fibonacci Retracement for the recent rally. The 1370 level is the 50% retracement. We’ll be looking for tradeable rallies to get going from one of these levels. But we’ll be waiting patiently. Let it come to you. I think from our experiences with the Fibonacci numbers, when we see momentum pick up, while prices are still making new lows towards these specific levels, there are usually some nice risk/rewards opportunities that present themselves. So be patient and wait for your pitch. It’ll come.


Tags: $SPY $SPX