Message from our TA expert friends: the rally of last week may be over for the time being, watch levels, stay defensive.
SP500 Fails at Confluence Fibonacci Resistance
Courtesy of Corey Rosenbloom at Afraid to Trade
Last week, the S&P 500 rallied into a Fibonacci Confluence zone which was met with resistance. At present, this zone is proving to be a significant resistance zone which halted the recent strong rally. Let’s see this confluence resistance zone on the daily chart.
The main take-away is the following:
Drawing off the significant recent March swing low to two recent highs (namely the January high and the November high), we arrive at the following confluence:
837 is the 50.0% retracement off the November highs
835 is the 61.8% retracement off the January highs
Both these levels converge to form a simple Fibonacci Confluence Price (resistance) at 836, which recently served as resistance.
As of Monday morning, price had also broken through a weak confluence zone about the 800 level.
This could be the birth of a retracement swing down which we’ll all need to watch closely as it develops.
Corey Rosenbloom
Afraid to Trade.com
