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The market was all over the placed today, and I noticed on my /ES chart a horizontal line that seemed to have significance. I was so occupied today I didn’t bother trying to figure what it was while the market was open, but it bounced off it (green tint), fell hard once it slipped beneath it (cyan tint) and then went zipping back up to it right up to the close (magenta tint).
Just as the Super Bowl was a dud to watch (sorry Patriots fans, that game was terrible), this upcoming week may bring a dud for bulls in Apple ($AAPL).
The S&P 500 (SPX) is right at a price zone pointing more towards a meaningful give-back in the short-term. This zone of resistance can be viewed through the Fibonacci price and time relationships on the daily SPX chart.
As the chart shows, as of Friday’s close, the SPX resided approximately 16% above its late December lows, amounting to an exact 62% Fibonacci recovery of the entire prior decline from the Sep 21 all-time-high at 2940.91 to the Dec 26 low at 2346.58.
This is yet another “wow!” moment for me. I present to you below the financials ETF, symbol XLF, with a Fibonacci retracement laid on top. I was quite excited to see the result, which is similar to what we’ve seen with the Russell 2000. The retracement is spot-on!
Ever since Jerome Powell demonstrated he has absolutely no backbone, and is far, far more concerned about having his feelings hurt by a mean tweet than he is about the long-term stability of the United States, the equity markets have been on an explosive ascent.
I would like to quietly point out something that 99.9999% of people are unaware of, which is the Fibonacci retracement spanning the entire decade-long bull market of the Russell 2000:
