Hourly SP500 Fibonacci Retracement Grids for the end of November

Nov 22, 2011: 3:13 PM CST

If you’re following Fibonacci Retracements, these tools have worked well in finding price support during the recent sell-off.

Let’s take a look at two short-term Fibonacci Retracement grids on the S&P 500 and note where these grids converge.

First, the shorter term hourly intraday grid:

Starting with the October 4th low, I’ve drawn a textbook grid to the recent October 27th high, and we see the resulting downward Fibonacci Retracement levels against the “October Rally.”

While price is trading lower in a potential “Rounded Reversal” or “Mirror Image Fold-back” Pattern, price found intraday support at the 38.2% and recently 50% corresponding retracement level (1,209 and 1,183).

Generally, when one Fibonacci retracement level fails, price plays lower to the next level as seen in the chart action above.

While these are the short-term levels – 1,158 being the 61.8% simple target if the 1,180 level fails – let’s pull the perspective back to find another retracement grid to monitor:

This time, we start with the July 7th high and draw to the same October 4th low, only this time we’re drawing an UPWARD retracement grid against the “August Crash” period and October low.

Price turned lower at the confluence of the 78.6% (advanced) level along with the simple 1,300 overhead level which put us in the current retracement phase lower.

Cutting straight to the point, the Bigger Fibonacci grid forms two convergences with the Lower Fibonacci grid:

1,210 to 1,215 (last week’s low)

1,183 (the low for Monday and Tuesday of this week).

The main idea from a trading standpoint is to watch price relative to the 1,180 confluence:

A breakdown here sets up a play for 1,160 or lower, while any upward movement (especially a movement back above 1,200) suggests a stronger rally (perhaps back to 1,250 which was the ‘heart’ of the Triangle Pattern) may be underway.

Be sure to incorporate these Fibonacci Levels into the other methods you’re using for your trading and analysis at the moment to uncover additional confluences.

Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “Hourly SP500 Fibonacci Retracement Grids for the end of November”

  1. Dan Says:

    On the larger Fib grid you included the 78.6% level of 1296. But you left out the inverse, the 23.6% level, which is around 1141. That seems like the next reasonable target if 1182 is broken to the downside.

  2. Steelex1 Says:

    and now—-below 1074 this time? 

    more than technicals are involved this time

    seems valuations should not drop below that, but it is an area i do ot have the knowledge or experience to even guess    your besst estimation sir?