SP 500 Futures
The chart below is key to this analysis.
From last week,
We know the election drove this market to new highs, however it is what it did before then, that is so important. By holding the 23.6% level back to the 8/5/24 low at 5735.00 we should be looking for new highs for the move. We did watch the 78.6% level above at 5884.00, but there was no turn lower from it and it now has two closes above the 5993.00 major Gann square and this will be key for the next week. Going back a little further this market has continued to hold the 38.2% and 23.6% retracement on each of the previous lows to keep the trend positive. The first was on 8/5/24 when it hit 23.6% (5200.00) back to the 2022 low and 38.2% (5115.00) back to the 10/27/23 low to keep the long term trend positive and new highs followed. The second low on 9/6/24 had one close below 38.2% back to the 8/5/24 low at 5465.00 and the next day it was right back above it and then went on to a new high.
Here are the short versions of the 38.2% and 23.6% retracements rules,
The 38.2% level is the single most important retracement and is the level we use for the “Golden Rule”. This rule being, ” any market that is going to keep its current trend must hold 38.2%“. As long as it does the trend will continue and it should make new highs/lows from that retracement.
Extremely strong/weak markets will only go back 23.6%. This is Typically a runaway market.
Use 5993.00 as the swing point for the week.
Above it, the long term target area above is 6102.00 to 6142.00. This is a cluster of major Gann squares and the area that a possible longer term top can come from. A failure to turn lower from this area gives us only major Gann squares above to look for resistance and then use as the swing point when closed above, the next one is 6290.75.
It now has two closes below the 5993.00 major Gann square. The long term target area of 6102.00 to 6142.00 comes from levels back in 1981, 1987, 2009, 2016 and 2022, so the 6053.25 could be a long term top, as we said in the Gold,
getting as close as it did to the 2841.50 Gann square cluster (from a long term perspective), we will watch all the retracements below to see if a bigger break is coming.
We will now watch for the key levels below to see if this will indeed be a longer term top. It has not yet taken any key support levels out so it is not necessary to watch the retracements above just yet.
Use 5993.00 as the swing point for the week again.
Above it, this is still the same,
The long term target area above is 6102.00 to 6142.00. This is a cluster of major Gann squares and the area that a possible longer term top can come from. A failure to turn lower from this area gives us only major Gann squares above to look for resistance and then use as the swing point when closed above, the next one is 6290.75.
Below it, the tightest support area is the 5850.25 major Gann square and 23.6% back to the 8/5/24 low at 5832.00, if this area holds the trend remains extremely positive and new highs can quickly follow. The next key area is the 5706.00 major Gann square and 38.2% of the same move at 5695.00. If a longer term top is in place, look for the area of 5453.00 to 5426.00, this 23.6% back to the 2022 low, the 200 day moving average and a major Gann square. The long term swing point is now 5083.00, this is 38.2% back to the 2022 low.
We have done 44 videos on how to use the Fibonacci retracements with the ONE44 rules and guidelines. These Videos are worth watching even if it is not in the market you are trading, as the ONE44 rules and guidelines are the same for every market. You will also see why we believe the Fibonacci retracements are the underlying structure of ALL markets.
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