We have seen that the Dow Jones broke the 61.8% Fibonacci Support 2 days ago. The market seems to continue to dive, do you think the Fibonacci theory will hold true that the US markets can indeed continue falling down till the 2002/3 low.
Well, I do not know if that will be true but I will take caution in my trading if that turns out true.
I am looking at the S&P 500 index today and it has also broken the 61.8% Fibonacci support too. Let’s take a look at the S&P500 immediate support and resistance now!
S&P500 May Continue Downtrend or Sideway Movement between Support and Resistance
Looking at the chart, you can see that there are lots of dark candle in the S&P500 chart. That is not a good sign. We saw a doji formation yesterday and it shows that the market is a bit uncertain which direction to move.
Looking the the candle 3 days ago, S&P500 broke the 61.8% Fibonacci support, meaning that it can head down the to 100% support level based on Fibonacci theory. That also implies that the market can potentially continuing plunging till the 2002/3 low, which is around 775 level.
The immediate support that we are seeing is around 936 level and immediate resistance will be around 1,114. The market may have a rebound soon, either on hitting the immediate support level or slightly before the support level and it will hit the ceiling again at the resistance level. That will create a lower low at the resistance.
After which, the market can either continue its down trend to form another lower low or support at the 936 level to form a sideway market. It is hard to say now. We need to monitor the price action in the next few weeks to gather more data before making a conclusion.
S&P500 Broke Fibonacci Support and Continue Plunging
Shorting at Resistance Offer Some Opportunity
From trading perspective, I am waiting for the S&P500 to hit the resistance and short near the resistance. The reason is simple. Based on my earlier analysis, I am seeing the market likely to continue down trend or sideway, so shorting at the resistance will be a favourable position to take in both a down trend or sideway market.
Watch the video to know a bit more about the indicators and volume divergence.
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
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