Its a bloodbath out there for Stocks. Treasuries and Gold are on absolute fire. When there is no bottom in sight and all support levels have been broken, it’s important to take a step back and look for levels where potentially (let me emphasize POTENTIALLY) the stock market could find some support.
Our old buddy Leonardo Fibonacci helps in these cases. Traderknowledge provides us with a handy Fibonacci Retracement calculator to help with the math.
Below is a Weekly bar chart of the S&P500 going back to the 2009 March bottom up to the recent highs in May. Remember that these levels might not mean much to you, but there are enough traders and money managers out there watching these prices that it almost forces you to keep them in the back of your mind.
Bottom fishing is dangerous here. I’ve been stopped out of some trades over the last couple of weeks trying to pick a bottom in some stocks. It happens. Ultimately the market will find some support. The rip-your-face-off rally that it could create will be fast and furious. I would not be surprised to see a bottom like that come off of one of these levels.
Stay nimble, try to manage risk the best you can, and watch these levels. They could come into play soon.