ABC/FIB Support Zones
Broke the triangle retested and failed as expected. Retracements happen, and then the media will grasp at any headline possible for it being the reason the market went up that day (Yesterday: Questionable China Calls). Looking for the retrace to complete around the red trendline in the 2894 area.
It gets interesting from there. The white trendline has been a support/resistance zone for the past year and a half. It's likely we meet it again. The question is how? If it meets and rejects it, the whip-sawing or bull case can continue to be made in the short term. If there is a high volume push through and close below the trendline. The setup for a quick retest and further sell-off will continue.
In ABC corrections, A and C typically correlate in some fib way. Commonly, them being equal in length. Which would bring support around 2700. A logical pivot area. C- Waves can also be .618....1.618...2.618 of wave A . Interestingly enough .618 brings us right on the white trendline. Hence the reason its important to let the price action and volume do the talking.
Here's where the fun starts though. 2700 would mean lower lows from May and more technical damage down. Wave extensions happen. 1.618 of wave A would be around 2555, essentially no mans land. No support, no reason to believe the fall would stop there. So we look to where 2.618 would bring us......No coincidence....right smack on the December lows. Worry about what happens from there if we get there. STAY OPEN MINDED.
**NOT Trade Recommendations, ALWAYS do your own analysis**
It gets interesting from there. The white trendline has been a support/resistance zone for the past year and a half. It's likely we meet it again. The question is how? If it meets and rejects it, the whip-sawing or bull case can continue to be made in the short term. If there is a high volume push through and close below the trendline. The setup for a quick retest and further sell-off will continue.
In ABC corrections, A and C typically correlate in some fib way. Commonly, them being equal in length. Which would bring support around 2700. A logical pivot area. C- Waves can also be .618....1.618...2.618 of wave A . Interestingly enough .618 brings us right on the white trendline. Hence the reason its important to let the price action and volume do the talking.
Here's where the fun starts though. 2700 would mean lower lows from May and more technical damage down. Wave extensions happen. 1.618 of wave A would be around 2555, essentially no mans land. No support, no reason to believe the fall would stop there. So we look to where 2.618 would bring us......No coincidence....right smack on the December lows. Worry about what happens from there if we get there. STAY OPEN MINDED.
**NOT Trade Recommendations, ALWAYS do your own analysis**
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