It starts with the blowoff top we had from 1998 to 2000.
That marks a rally worth retracing. 1390 to 5080 intraday.
You can quibble about some numbers but the focus is on the area of support and resistance. I assume you understand how the Fibonaccis work from technical analysis. First number, second etc.
From the move 1998 to 2000, we have numbers:
1: 4220
2: 3560
3: 3140
4: 2720
Each represents an approximation of the fibonacci retracement from 1998 to 2000: 23.4%, 38.6%, 50%, 61.4%.
First number represents the initial pullback and ultimate resistance going back up ( I am speaking in Bear mkt terms, here). NAZ never really settled on this number but moved quickly to level 2 (bad deal). But did have 2 failures this summer at that level 1 (bad deal^2)
Mkt has already seen level 3 after its snap back rally to around 4000 and renewed failure to 3100 area in May. After jumping back up to the top area ( a good sign) from 3100 with little pause at 35xx, things look good.
Next the market came back to 35xx area in a retrace to the level 2, which is Ok, even expected. The next move should get us up to level 1 again--4280 is where we reached-- and it has since come back down. Past level 2 and probably set for level 3.
Too far. Today. We ultimately revisit the lower number, level 4 after a fight around 3100 to 3500. Fibs. often retrace to 61.4 and lately, I see so many stocks doing the next level at 76.4% and still recovering. While I like a battle between 3100 up to 3600, I can see a good chance of ultimate breakdown again (next year?). Maybe quick or slow death. I expect a good rally soon, since oversold is the word.
I sit on the sidelines until I see better picture, but keep those QQQs one more day |
