Triple Stock Market Index Fibonacci Support Check (SPY, DIA, QQQ, INDEXSP:.INX, INDEXDJX:.DJI)
Corey Rosenbloom: After a steady retracement took the US Stock Market Indexes to lower support level targets, let’s take a look at these targets and what Index levels we will be watching closely in the week ahead.
Let’s start with the S&P 500:
The key chart levels we’ll be comparing across the three indexes are the 38.2% Fibonacci Retracement and the 200 day Simple Moving Average.
In the S&P 500, the key “Round Number” psychological reference level is of course 1,300 and buyers stepped in throughout the trading day to defend this level.
Beneath 1,300 is the critical confluence of the 38.2% Fibonacci Retracement at 1,290 and the rising 200 day SMA at 1,278, making the 1,280/1,290 area the key indicator-based confluence support.
If we stretch back to late 2011, we also see the 1,290 level was a spike high in October, making it a polarity support level.
Quite simply, we’ll be watching the market relative to this level, being cautiously bullish above 1,300 (notice the 20/50 EMA cross and price target near 1,350) and otherwise bearish under 1,270.
The picture is similar in the Dow Jones Index:
While the S&P 500 reversed at a logical prior price support level, the Dow Jones power-rallied off 12,400 which is above the equal confluence of the 38.2% Fibonacci Retracement and 200d SMA at the 12,200 level.
As such, 12,200 will be the indicator-based confluence support which aligns also with the visual resistance from late 2011.
Finally, the NASDAQ also rallied today slightly above its critical confluence:
Unlike the S&P 500 and Dow Jones, the NASDAQ Index actually broke the 38.2% Fibonacci Level on Friday and clawed back above the 2,800 level.
However, similar to both the S&P 500 and Dow Jones, the NASDAQ also formed its initial rally above the weak confluence near the 2,700 and 2,750 level.
Again, we reference the late 2011 swing highs in price with the 50% Fibonacci Retracement and 200d SMA.
Be sure to add these reference levels to the trades and analysis you are conducting in these indexes.
Related: Dow Jones Industrial Average (INDEXDJX:.DJI), S&P 500 Index (INDEXSP:.INX), Nasdaq (INDEXNASDAQ:.IXIC), SPDR S&P 500 ETF (NYSEARCA:SPY), SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA), Powershares Technology ETF (NASDAQ:QQQ).
My name is Corey Rosenbloom, CMT (Chartered Market Technician) trader, educator, analyst, and I am excited to share with you my experiences studying and trading the markets and to hear from you regarding your experiences, challenges, and frustrations, and successes. My goal is to create a community dedicated to reaching out to those who have been burned by the market or are anxious about risking their money to make money in the stock, options, or futures markets. Together, we can share strategies and learn how to overcome crippling fears that keep us from achieving our highest potential.