The S&P 500 continues to trade textbook, technically speaking. On the daily chart here see that the November low hit the 61.80% Fibonacci retracement of the June – September rally almost to the tick before bouncing sharply.
Closer-up, on the 30 minute chart looking back to November 28th the same thing. This morning’s slide bumped right up at the 61.80% Fibonacci retracement where so far it bounced just about 100 bps. Oh and by the way, that level also happened to be 1400 on the S&P 500. It was what I call a confluence zone where multiple signals come together, and should 1400 never get pierced again for the remainder of the year (not extremely likely) then this pattern along should send the index to 1430.
If you’re not watching the EUR/USD correlation with S&P 500 futures…may be something to consider. Mean reversion is what I am talking about here. Just as the S&P 500 ramped 100 bps off the morning lows today it also moved back to EUR/USD, where they now dance in all harmony until the next whisper of a misstep hits the tape.
