This weekend has still been very much in "Mind-Whirling" mode. I have also been in constant contact – in person, on the phone, and via email – with a variety of folks from the trading world – – all of them whip-smart, and all of them as bewildered at the market as me. It's comforting to know that I'm not the only one scratching a valley into my scalp.
Since 90% of my invited guest writers seemed to have skipped town, and the only 10% contribute every now and again (which I appreciate, believe me), I am sometimes feeling a bit short on material: particularly on a Sunday morning, when I emptied my modestly-sized noggin out the prior day..But I landed on one interesting item I've noticed, which is the extremely long-term Fibonacci Fan lines on the S&P 500.
I've drawn a couple of them, both of them starting July 8, 1932 (yep, nearly 80 years ago) and ending on March 24, 2000 (for one) and October 11, 2007 (for the other). The lines, over the decades, have been amazing guideposts for market action. For instance, during the 70s:
……..in the late 80s and early 90s……..
So what does it tell us today? Well, the S&P seems to be facing off with two of these levels. As you can see in the chart below (and take note how, last March, it bounced beautifully off the 61.8% line) we are just about precisely at one of the fan lines (suggesting a resistance level) and about 75 points away from another fan line (from the other series).
So what this tells me is that, unless we get some weakness almost immediately, we're in for about another 75 S&P points on the upside, coinciding with very late March/very early April (which kind of plays well into the "people will start selling for tax reasons in March" scenario).
