The S&P bounced be-YOO-tifully against the old, upper Fibo level I talked about yesterday. If you didn’t read that one, it’s the two horizontal pink lines that represent at 61.8% and 50% retrace level from the 2008 high to the 2009 low. This also coincides with my personal bias that this markets is slowly retracing a recovery from those 2009 lows, and will make it back up to those 2008 highs again….someday.
In the near-term, I expect a correction here. If we continue mimicking the weekly S&P pattern (again, discussed yesterday; you keeping up?) we should see range-bound trading for a few bounces before a bigger drop to the 50% retrace at 1,150. That didn’t happen until the 34-MA caught up to price while a nice H&S pattern formed. We don’t have to do that here, but it will be interesting to see if we get a triple-top within the range before moving out, either up or down. This hourly chart shows that 34-MA crossovers for peaks provided excellent confirmation, albeit a bit slow.
Notice the false breakout on August 31 at this same level. Stay on your toes, I feel a good buying opportunity coming on.
