Intraday Fibonacci Confluence Example SPY Jan 25

Jan 26, 2010: 10:57 AM CST

Admittedly, it’s not the most exciting blog post title, but I always enjoy highlighting quick tips whenever possible on intraday trading tactics, and Monday’s action gave me a great chance to share a quick example of a near-perfect intraday Fibonacci Confluence.

Let’s see it and learn how to use this trick in the future.

Starting with Thursday’s end-of-day swing high at the $112.40 level and then drawing a second grid at Friday’s intraday high at $111.60, we then draw two standard Fibonacci Retracement grids down to Friday’s intraday low at $109.10.

What we are looking for – going forward – is any level where the grids overlap and form a confluence zone in expectation that this level would be both a target and an overhead resistance level to put on a short-sale trade.

That is exactly what happened.

Price gapped up into the convergence of the larger 38.2% level and the smaller 50.0% retracement level, formed reversal candles (dojis) and then fell into lunchtime.

As price rallied off the $109.50 level, we had a final push back into the confluence at $110.35… and this time a bearish engulfing candle formed which was a good spot to put on another short-sell trade.

Of course, you would be using additional tools (moving averages, market internals, etc) but you can try to find “hidden” Fibonacci confluence zones like this to have levels to watch in advance and then see how price reacts should it test this confluence level intraday.

Corey Rosenbloom, CMT
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3 Responses to “Intraday Fibonacci Confluence Example SPY Jan 25”

  1. Intraday Market Internals Showing Strength Jan 26 | Penny Stock Trading System Blog Says:

    […] price can rise above the 1,094 resistance level as seen from yesterday’s trading (it was the Confluence Fibonacci Level as mentioned in this morning’s SPY […]

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