SP500 Fibonacci Price Clusters and Confluence Chart

Dec 8, 2008: 2:15 PM CST

Here’s a chart you might want to save as a reference in terms of overhead possible Fibonacci resistance levels and their respective confluence zones.  The graph takes the S&P 500 swing highs and runs corresponding Fibonacci retracement grids all to the most recent 750 spike low in November and highlights areas of Fibonacci clusters.  Let’s see the grid.

S&P 500 Fibonacci Cluster Grid:

You can click the image for a larger chart to appear.

I’m using a hybrid method of Constance Brown (Technical Analysis for the Trading Professional) and Carolyn Boroden (Fibonacci Trading: How to Master the Time and Price Advantage) for this grid – namely Connie Brown advocates avoiding ‘spike’ highs/lows in drawing Fibonacci grids (in favor of more meaningful, closing basis reference points) while Carolyn Boroden describes how to trace multiple Fibonacci grids to a singular swing high or low and how to analyze the grid properly – no, I won’t give away the secrets in this post… merely the grid itself.

I’ve taken each meaningful swing high and drawn a corresponding Fibonacci grid via StockCharts to the 742 S&P 500 swing low in mid-November.  The middle of the chart – all the lines – represent each Fibonacci retracement grid drawn automatically off that key swing low.  This chart and the analysis to be made from it will only hold IF and only if the 742 low is not taken out anytime soon.

This is a more formal way to answer the question, “How far might the counter-rally (or Elliott Wave 4) go?”

Also, this is a roadmap to note key areas of possible short-term resistance as price tries to make a move higher – these zones can be particularly helpful for intraday traders as price tests these upside boundaries and either finds resistance at them (setting up exit targets… or potential entries) or breaks through them (setting up long entries into fresh trades).

Now, one can do a lot with this grid, but I wanted to keep it simple, provide it as a reference, and comment that the two most obvious zones of Fibonacci confluence lie at the 1,085 and 1,162 areas.  Keep in mind that this grid does NOT take into account longer-term Fibonacci grids (something you might want to do yourself).

The Blue grid will provide more significance than grids of smaller magnitudes, as it represents the key retracement zones of the entire bear-market price move (so far).

Apply your own analysis to the grid and feel free to share any insights in the comment section you discover for the benefit of other readers.

Corey Rosenbloom
Afraid to Trade.com

4 Comments

4 Responses to “SP500 Fibonacci Price Clusters and Confluence Chart”

  1. Nepharis Says:

    Nice. I think we’ll see some resistance for a few days, as it’s hitting the 50 day MA (http://stockcharts.com/c-sc/sc?s=$SPX&p=DAILY&b=5&g=0&i=0&r=7308), but I do like ~1070 for a target, I’m thinking around the new year. 1160 seems like a lot of bounce, but I wouldn’t count it out for a second push into February/inauguration.

  2. Claudio Says:

    sheat

  3. chenxin Says:

    http://macmakeup12.bloggd.org/
    http://macmakeup12.blogoak.com/
    http://macmakeup12.allmyblog.com/
    http://chenjieuu.tumblr.com/
    http://macmakeup12.blogdetik.com/
    http://macmakeup12.nipox.com/
    http://macmakeup12.podbean.com
    http://www.blogstoday.co.uk/bloghome.aspx?username=macmakeup12
    http://hurones.net/blog/4188
    http://www.panaspace.com/user/macmakeup12/blogs
    http://www.kerchoonz.com/user/macmakeup12/blogs
    http://blog.zol.com.cn/macmakeup12/
    http://imfriends.net/user/chenjies/blogs
    http://www.haylove.com/member/view_blog.php?profile_id=401
    http://macmakeup12.createblog.com/blog/
    http://smartdating.mobi/member/view_blog.php?profile_id=2045
    http://www.crimetime.co.uk/community/macmakeup12/blog/
    http://www.muslimduniya.com/member/view_blog.php?profile_id=780
    http://polovinka.bg/member/view_blog.php?profile_id=22823
    http://videochatpals.com/blogs/posts/cheap
    http://imfriends.net/user/chenjies/blogs
    http://chenjie23.blogbus.com/
    http://www.bambinidisatana.com/network/blogs/liststories/user_chenjies
    http://www.newar.com.np/blog.php?user=macmakeup12
    http://obshestvo.ru/blog/1468
    http://codesnipers.com/?q=blog/12453
    http://smartcepp.com/blog/5783
    http://saswingers.org/blog/6948
    http://www.9ksa.net/set/blogs.php?action=show_member_blog&ownerID=16
    http://www.fabay.com/macmakeup12/blog/
    http://www.mygatheringspace.com/blogs.php?action=show_member_blog&ownerID=16
    http://groupeiservices.info/blogs/posts/macmakeup12
    http://www.phillymusic.org/blogs.php?action=show_member_blog&ownerID=4331
    http://www.youaction.com/user/macmakeup12/blogs
    http://www.nutricionistas-online.com.br/blogs/posts/macmakeup12
    http://www.bigfriendsgroup.com/user/macmakeup12/blogs
    http://firstdatesf.com/blogs/posts/macmakeup12
    http://gem.socialgo.com/members/profile/3722
    http://www.igolf.to/view_blog.php?profile_id=828574
    http://chenjieuu.livejournal.com

  4. Fxxtrader Says:

    Hi Corey,

    my platform won't draw fib support or resistance levels as Connie suggest: for support start at the high and move down to the low and for resistance start at the price low and move up to market price.  The book says to change default setting so that the line ratios are drawn across the entire computer but I do not know how to do that.  I am trading with marketscope, any thoughts on changing the default way of drawing fibs?