After Wednesday's FOMC interest rate announcement, press release, projections, and Q&A period with Mr. Bernanke, I decided to look at four different timeframes of the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices to see where they're trading at relative to each timeframe and in terms of relative strength/weakness to each other.
Each candle on the first chartgrid below represents a period of one year and the period begins in 1992. I've drawn a Fibonacci retracement on each one which begins in 2007 for the Dow and S&P, and 2002 for the Nasdaq and Russell (I didn't want to include the high of 2000 on the Nasdaq as that would distort the results of this exercise, so I chose the high and low of each of the four indices from 2002 to the present). You will notice on the Fibonacci drawing that I've shown some of the levels in bold and others in a thinner line thickness…the bold lines are the high and low, the 50% level, and non-traditional 33.3% and 66.6% levels…the thinner lines are the 38.2% and 61.8% levels. You'll see the purpose of the 33.3 and 66.6% levels in a minute.