Long Term Monthly Fibonacci Levels to Watch in the NASDAQ

Dec 22, 2009: 2:41 PM CST

Per a reader’s comment, I wanted to show a quick reference grid of the NASDAQ Index stretching back to the 2000 peak above 5,000 and show three dominant Fibonacci Grids to watch as price moves into the future.

Let’s see the 10-year grid, starting with the 2000 high and stretching to the 2002 low.


(Click for full-size image)

I’ve drawn two long-term Fibonacci retracement grids starting with the March 2000 high of 5,136 and then the September 2000 high of 4,260 – both of which connect to the October 2002 low of 1,110.

For reference, the retracement values are the following:

From the March 2000 all time high to the October 2002 low (blue):

61.8%:  3,595
50.0%:  3,120
38.2%:  2,645

From the September 2000 ‘swing high’ to the October 2002 low (red):

61.8%:  3,056
50.0%:  2,684
38.2%:  2,312

Where are we now in terms of the long-term structure?

Price is just under the all-time high retracement grid of the 38.2% Retracement at 2,312.

This level forms a confluence with the most recent “Bear Market” that began in October 2007.

I’ve drawn this short-term Fibonacci Grid in purple with the following levels:

61.8%:  2,251
50.0%:  2,063
38.2%:  1,875

Price currently rests at the 2,252 level, exactly at the 61.8% retracement (just as the S&P 500 rests at 1,120 – the 50% retracement).

Implication?

Price has been finding resistance at these levels, but any break higher would shift the bias, structure, and ‘game’ to expect further upside potential to target higher levels, as these key “lines in the sand” (or price reference points) will have been broken.

That could send the NASDAQ up to 2,312 quickly, and any move above that could send the Index back to the next confluence area at the 2,600 level.

This would send the S&P 500 up to the 1,220 level.

See these ‘critical resistance’ levels closer in my recent post:

“Critical Weekly Resistance Levels to Watch in the NASDAQ, Dow Jones, and S&P 500”

Be safe and don’t fight a bullish break above these critical resistance levels.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

2 Comments

2 Responses to “Long Term Monthly Fibonacci Levels to Watch in the NASDAQ”

  1. pipercolt Says:

    yes as bearish as we all want to be boy that chart looks bullish if you look at the double bottom there. perhaps we will get a move lower here at those confluence areas .618 2007 and .38 of that second high. Certainly puts in perspective how crazy things can run.

  2. pipercolt Says:

    yes as bearish as we all want to be boy that chart looks bullish if you look at the double bottom there. perhaps we will get a move lower here at those confluence areas .618 2007 and .38 of that second high. Certainly puts in perspective how crazy things can run.