When using Fibonacci time and price analysis I like to take it from one decision to the next.
My first chart is a weekly S&P 500 (SPX) that illustrated the grouping of Fibonacci time cycles. This data tell us that the ODDS are a corrective decline to unfold in the SPX are higher than usual. The fact this this market is pretty extended to the upside suggests the same. If we do get a correction similar to some of the prior major declines, we could see anywhere from a 130-155 point decline!! Remember though….that does not mean that we will see one!! The last time I saw time cycles similar to these, the market just continued to rally instead.
So this is how I have to look at it. I’m considering the 5/22 high (~1687) key and pivotal in the SPX. The daily chart below is illustrating a key support decision on the way down. If this support is violated, then I believe we can start to see a healthier corrective decline start to unfold.
If this same key support holds however, the shorts are likely to get squeezed again.
SPX is hanging in there with a small gain this afternoon. Let’s see what the market does against this immediate support decision and trade accordingly!!