Measured Move Price Projection Targets for SP500 and Dow

Nov 16, 2009: 12:51 PM CST

With price resembling a “Measured Move” pattern – a type of loosely defined flag pattern – let’s take a look at the full price projection target off the March lows for both the S&P 500 and the Dow Jones Index… which are now mere points away from a full move.

First, the S&P 500:

The “Measured Move” price projection target – using the Fibonacci Projection/Extension tool – comes in near 1,150.

Next, the Dow Jones:

The same price projection target comes in at 10,450 in the Dow Jones Index, roughly 50 points away.

The logic behind this tool is described in my “How do we Find Fibonacci Price Projection Targets” article which explains the use of the tool.

The basic logic is to observe a solid price swing, observe a pullback/retracement against that swing, and then “project” the 100% (or full) price projection of the prior swing starting with the low of the retracement.

This is the logic behind price projections in Bull and Bear Flags, but measured moves are loosely defined patterns that focus on price points instead of a pure pattern.

It’s not to say that price will hit these levels and fall downwards as if they were brick walls in the sky, but it will be interesting to note if price does move beyond the distance of the prior upward impulse from the March lows.

It would strongly suggest that the market was confirmed in an expansion phase if this ‘swing’ from the July lows is greater in price movement than the move off the March lows.

Otherwise, the classical interpretation would have us expect resistance at these levels.

Corey Rosenbloom, CMT
Afraid to Trade.com

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8 Comments

8 Responses to “Measured Move Price Projection Targets for SP500 and Dow”

  1. terlyn Says:

    That's because I got stopped out of my short position and went long! 🙁
    Is the measure for a breakout from a triangle the length of the fat part of the triangle? eg, YGE 3-month triangle (I think).

  2. Corey Rosenbloom, CMT Says:

    Oh No!

    The “popped stops” worked well in the morning as we crested to new highs.

    Yes, we take the height of the triangle (largest zone from where the trendlines originate) and then add it up or down to the breakout from the triangle nearest the apex.

  3. terlyn Says:

    Thanks, Corey. I hope my analysis is correct on YGE.

  4. terlyn Says:

    That's because I got stopped out of my short position and went long! 🙁
    Is the measure for a breakout from a triangle the length of the fat part of the triangle? eg, YGE 3-month triangle (I think).

  5. Corey Rosenbloom, CMT Says:

    Oh No!

    The “popped stops” worked well in the morning as we crested to new highs.

    Yes, we take the height of the triangle (largest zone from where the trendlines originate) and then add it up or down to the breakout from the triangle nearest the apex.

  6. terlyn Says:

    Thanks, Corey. I hope my analysis is correct on YGE.

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