Fibonacci Retracment rears its head again.
We've been watching the big picture market retracement rally for some time. From the 2007 S&P 500 Index (SPX) (NYSEARCA:SPY) highs to the 2009 panic lows, we've now regained a significant amount of the losses. The problem? The 50%, 61.8% and 31.8% Fibonacci retracement levels now become potential resistance levels to further market upside.
Take a look at the SPX Weekly Chart below that we've discussed previously:
SPX Weekly Chart
You can see that the recent market correction began after we approached the 61.8% retracement level around 1,228. We've now busted down through the 50% level of 1,133, and look like a test of 1,014 (roughly 1k) is approaching. One potential positive to note is that we are right around a key level if you draw a trendline of the lows from late 2009 -- if this area holds as support, we could see a weekly bounce to 1,150 or 1,200. Remember though, that these are longer-term weekly charts and the trends are fairly wide as are the weekly high/lows. That's why we utilize Hourly, Daily and even shorter-term charts four real-time BigTrends.com trade recommendations.
Disclosure: No positions.