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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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Friday, January 15, 2016

SPX: In the Grand Scheme of Things

The Monthly chart below of the SPX shows where price closed today (Friday) in relation to its lows of 2009. The price has been bouncing in between two external Fibonacci retracement levels (127% and 161.8%) since October 2014 -- which represent major resistance and near-term support levels.

A break and hold below near-term support (at 1,823), puts the next support level at, between 1,730 and 1,735 -- a confluence of the 40% Fibonacci retracement level (taken from the October 2011 lows to the 2015 highs) and the 127% external Fibonacci retracement level (taken from October 2014 lows to the 2015 highs).


The next chart shows the percentage gained on the SPX from the lows of 2009 to the highs of 2015, as well as where price sits today in percentage-gained terms. The SPX is still around 156% above its 2009 lows, in the grand scheme of things.


So is it time to panic? Perhaps the time would be if/when price drops and holds below 1,823, inasmuch as major support sits far below, between 1,575 and 1,625 (quadruple Fibonacci confluence). 

However, we will likely see continued volatile swings in both directions until a new trend is established either way, which could take most, if not all, of this year. In the meantime, it's worth keeping an eye on the SPX:VIX ratio, as I discussed here, to gauge volatility strength/momentum.