Triple US Equity Index Confluence Fibonacci Support Reference Chart

Sep 26, 2011: 11:09 AM CST

With the US Equity Market sitting currently atop a longer-term Fibonacci cluster level, let’s take a look at the Dow Jones, NASDAQ, and S&P 500 in terms of their recent “Bear Market” and “Bull Market” Fibonacci retracement levels for reference.

Let’s start first with the S&P 500:

Click each chart for a full-size image – the charts are larger than normal due to the longer time period.

This is roughly identical to the recent “S&P 500 Fibonacci Cluster Level” post I wrote this weekend – today’s post extends that logic to the NASDAQ and Dow Jones Indexes for reference.

In today’s post, I also labeled a Fibonacci Projection based on the “Bear Flag” price pattern formation that many traders are discussing.

For reference in all posts:

The RED Grid represents the Fibonacci Retracements from the “Bear Market” from October 2007 to March 2009

The GREEN Grid represents the “Bull Market” Fibonacci Retracements from March 2009 to May 2011

The BLUE Grid represents the “Bear Flag” Projection target level which come into play ONLY on a break under 2011 index lows.

I’ll let the charts speak for themselves, calling your attention to the two immediate support levels in each index.

In the S&P 500, the current level has held support at 1,101 (38.2% Bull) and 1,121 (50% Bear).  This gives us a cluster between 1,100 and 1,120 which we’re all watching.

Beneath the 1,100 level, the next cluster forms at 1,015 which happens to coincide with the 2010 low (1,010).   The index would be expected to fall to this level on a firm break of the current support grid.

Now, on to the Dow Jones Index which carries a similar message as the S&P 500:

The immediate support cluster for the Dow Jones is slightly lower – forming a convergence at the 10,400 level as seen above.

In the event the Dow Jones trades under the 10,400 support cluster, the next downside cluster forms at 9,550 to 9,650 which includes the 2010 swing low of 9,614.  For simplicity, one could easily reference a downside cluster at 9,600, though 10,000 would be a key ‘psychological’ level to watch.

Finally, the NASDAQ shows a different chart picture due to the stronger “Bull Market” rally from 2009 that actually peaked at a new recovery high:

First things first – because the Red “Bear Market” Fibonacci grid begins at roughly the same level as the “Bull Market” grid, the ‘confluences’ you see above aren’t as valuable a reference as the different grids generated in the S&P 500 and Dow Jones.

In other words, the “confluences” in the NASDAQ are a result of the two grids originating from an identical bottom (March 2009) with near-identical tops (October 2007 and May 2011).

Anyway, the first downside support level forms near 2,270 or the 2,300 ‘easy reference’ index level.

Under 2,300 is the “Bear Flag” projection which coincides with the 2010 low (2,061) and the Fibonacci level near 2,070.

These ‘bigger picture’ Fibonacci Reference grids will not change, unless price in the next few months happen to break to new recovery highs above respective 2011 peaks.

Use charts as reference grids in terms of long-term Fibonacci Retracement levels in the US Equity Indexes.

Corey Rosenbloom, CMT
Afraid to Trade.com

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

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5 Comments

5 Responses to “Triple US Equity Index Confluence Fibonacci Support Reference Chart”

  1. Monday links: innovation and failure | Abnormal Returns Says:

    […] Checking in on some longer term Fibonacci retracement levels.  (Afraid to Trade) […]

  2. Sept 27, 2011 – Mr Fibonacci Reminders | Faceless Trader Says:

    […] Please take a look at Mr. Corey Rosenbloom’s excellent chart analysis in the US Equity indices as a guidepost. For more of his charts: click here. […]

  3. Lama Forecasting Says:

    i like the fibonacci zones, nicely done

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