Planning Fibonacci Retracement Levels for SP500 and Dow

Aug 28, 2014: 11:01 AM CST

“Always be prepared.”

Should the market continue trading down against the 2,000 level in the S&P 500 (and corresponding level in the Dow Jones), what simple Fibonacci Levels would be logical targets?

Let’s take a quick glance at the current Fibonacci Levels to watch on a continued retracement lower:

First, compare notes from yesterday’s update “Stepping Inside the Straight-UP Rally for the S&P 500” which detailed the divergences (including market internals which you’re seeing above) and the reversal candles on the daily chart.

The logic favors a retracement, but remember that any additional buying pressure triggers more stop-losses of the bears (short-sellers).

Nevertheless, we need a plan to trade lower (target to play for) if the logical bears are indeed successful in stopping this rally.

Simple targets for the S&P 500 include 1,968, 1,956, and 1,944 (all of which are short-term swing pivots from the past).

In the Dow Jones, the picture is similar:

Downside Dow Jones Targets include 16,850, 16,750, and 16,650.

No, there’s no guarantee price will achieve these targets but again we’re simply planning for them if the retracement extends lower.

Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

2 Comments

2 Responses to “Planning Fibonacci Retracement Levels for SP500 and Dow”

  1. August 28 Intraday Stock Scan and Market Update | Afraid to Trade.com Blog Says:

    […] Either way, we’ll focus all our attention on the 2,000 index level as mentioned in this morning’s earlier post. […]

  2. August 28 Intraday Stock Scan and Market Update - Trading Your Own WayTrading Your Own Way Says:

    […] Either way, we’ll focus all our attention on the 2,000 index level as mentioned in this morning’s earlier post. […]