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Overlayed on each of the following two monthly charts of the S&P 500 Index (SPX) is a Fibonacci Speed Resistance Fan.
The first one is taken from the low of March 2009 to the high of May 2015, which preceded the last major pullback to first fanline support and prior to the recent minor one this past February. Based on this fan trajectory, the first major resistance level sits just above the last all-time high (of 2872.87) at 2900.
The mighty weight of Slope’s bear power has been fully focused in oil as of late, as our beloved and hard working leader called a top on the black gold with accuracy that Dennis Gartman would pay for in U.S. dollar terms. (editor’s note: I’m touched!)
But is it time to pause or reverse? A bit of price and time analysis on the daily chart reveals a potential zone of trouble for bears.
First, let’s look at price.
When the front month contract switched to September on Tuesday evening, price gapped lower on the continuous chart to the top of the zone predicted by prior swing retracements in price amount during this bull market.
The following monthly chart of the S&P 500 Index (SPX) simply shows the monthly closes from its inception.
January’s (2018) close of 2823.81 nearly tagged its long-term 140% trend-based Fibonacci extension level of 2836.
As of 2:03 pm ET today (Monday), its price is currently below its 1.27% Fibonacci extension level of 2625.
Failure to recapture and hold 2625 could see price eventually decline further to 2220 (its 1% Fib extension level), or lower to around 2100, due to a lack of major price consolidation support below its current price until then. (more…)
Twitter (TWTR) is stuck in between two long-term Fibonacci retracement levels (after nearly tagging and retreating from the 40% Fib) and a downtrending channel, as shown on the following monthly chart.
Momentum had been building since mid-2017, but was capped in mid-February.
It is 29% lower than it was at the close of its first week of its IPO (November 7, 2013), and it has spent more time under water since then, as shown on the weekly chart below.
A drop and hold below 28.00 could see a further decline to 20.00, or lower. Alternatively, a break and hold above 40.00 would be needed to confirm a sustainable price rally.
Harley-Davidson Inc. (HOG) may become a casualty of President Trump’s “trade war” policies. In particular, his latest threat to impose a 25% tariff on steel imports and 10% on aluminum has produced a retaliatory threat against the U.S. by Europe on companies such as HOG.
No doubt, this new policy, if pursued by the U.S., would be argued before the WTO and have greater implications on other countries and goods/services. My post of November 12, 2016 made mention of the need for the new Trump administration and Congress to consider a number of factors so as not to, potentially, cause economic imbalances and a catastrophic domino effect on the rest of the world. This is a complicated issue and will bring forth many positions/arguments/considerations and may cause further instability in world equity, currency, financial, bond, and commodity markets until a resolution is reached. (more…)
Since the December 8, 2016 U.S. Presidential election, the Dow 30 Index has gained around 42.57%, as of 2:00 pm ET today (Thursday). It also crossed above a new all-time high of 25,500, as shown on the two Daily charts below.
As Ecclesiastes notes, “There is nothing new under the sun.” This, too, applies to the stock market.
The average investor trap is the same throughout whatever period you wish to review. Markets become overexuberant, see a correction, sentiment resets, and markets rally on to their next phase of overexuberance. It is really that simple. Yet, we overcomplicate matters by relying on economics and fundamentals, which have proven to be relatively useless at major market turning points.
On this quiet holiday weekend, I thought I’d share a couple of very long-term charts (which PLUS users enjoy via SlopeCharts) Here’s the Dow 30 featuring Fibonacci retracements and a projection. As you can see, the projection has been exceeded (see inset); in the normal world, this is called a “failure”, but in the world of charting, it’s a “throwover.”
Based on what I saw during my visit last night, Disneyland’s newest ride is the Leap Over an Opioid Addict attraction just outside the park. They were all white males around thirty years old or so, sprawled out on the ground. At least it was more engaging than the boring Monsters Inc. ride inside the park itself.
But that’s not why we’re here. It’s a Sunday morning, and I’m out of posts (except for one waiting in the wings for the appropriate afternoon), so I’ll cobble one together. It isn’t easy, though. See, here’s what a normal market looks like:
