Picking tops isn't much fun. Even when you find a zone likely to cause a reversal, the market will stay in that zone for a few weeks to a few months just to mess with you. I have been out of long positions, except for a few scalps here and there, since March. At that point I put the giant, red down arrow on the website. Since then we've just chopped around.
On the weekly chart above, you can see the SP-500 has been respecting the 50% fib fan since 2012. Every time it has touched this line a pullback has occurred. We are also within the range of 3 fib extension confluences from 1892-1954. I expect that at some point within this area the market will finally give up and drop to at least the 61.8% fib fan. If this line provides support we should look for highs up in the 2200-2400 range to come. If it fails to support the drop, I will conclude that the long term trend has changed to down and remain short.
Pointers: I am taking no long positions on the SP-500, at all.
Excellent use of the fib fan. It's an great tool that isn't used often. It works good on triangle formations also. . . .Herm
ReplyDeleteHey Herm. Are you saying the bcde legs of triangles bounce off fan lines? I'm interested in seeing this if you have an example. Thank you.
ReplyDeleteJim
Check .... http://up-ur-assets.blogspot.com/2014/05/eurjpy-triangle-formation.html
DeleteIt worked quite well there
Herm
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