Just when we thought taking out the Giant Wall 2 (GW2) established back in October 2007 was a done deal, we are now getting slammed with another European conundrum. S&P500 currently is printing a 17 points down or a negative 1.1% change. Apply this 1.1% against the SPY’s close of $155.83 last Friday and we come up with $154.12.
If you look at the chart below, you can see the projected price of $154.12 (red arrow) is directly below Giant Wall 1 resistance ($154.94). Notice that the 38.2% fib retracement is just a bit below the red arrow; it may mean some support there.
Can the Fed remedy this correction next week? Will there be a huge rally waiting to burst thru the GW2? Well, can it happens or are we simply exercising a self-fulfilling prophecy of topping out at major prior resistance? Let’s not jump the gun yet; for price can still restore back to normalcy when market opens tomorrow morning We’ve seen it happens before. Until then, I’m going back to reading my book…
My 2 cents.