The next level down (2.618) around 19.90, provided support in April for that last push up. It's broken today. Next support would be around 19.10--50% of the entire impulsive move. Then around 18.30.
The next level down (2.618) around 19.90, provided support in April for that last push up. It's broken today. Next support would be around 19.10--50% of the entire impulsive move. Then around 18.30.
Then RNF. Another pattern here, though the two stocks are related. There was a smaller base pattern, a move up to the 2.618 level, where some resistance was found, but not enough to end the move. Then a gap up and a final high for the move around the 4.236 Fibonacci target. The theoretical target was 30.40, the exact high 30.39.
The subsequent decline has been severe, breaking well below the original base pattern. One positive for longs is that on Friday we completed a impulsive pattern down. This can be seen on a 2 hour chart.
The 6.854 Fibonacci target was 22.57. The low on Friday was 22.56. We got a strong bounce intraday at this level (an almost sixty cent spike up within a minute or two).
Anyway, the horse having flown from the barn, here is what I found in a daily JPM chart.
Enjoy.
First an impulsive move down in early April:
That was followed by an irregular 3 wave correction, where the length of C equaled 1.618 the length of A (rather exactly).
And then another impulsive move down with the 2.618 Fibonacci target being met, once again, rather closely.
We have had one wave up after that target was met and a gradual move down, The negative commentary on this latest move down seems to be out of scale with the as yet rather gentle retracement.
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Assuming this is a mid-course correction, the next objective to the upside, 2.618 times the base, would be around 936.
Finally, two closer looks at the corrective action since early February impulsive top.
The 1.618 level became support, while there was no resistance at 2.618. That put the next exponent, 4.236, into play. Achieved this morning.
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Bing, bang, boom.
If pattern continued down to the next level (4.236), we would be looking at a target around 1369.
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Notice how there was initially some resistance around the 1.272 Fibonacci level in late January. Then a clear break above it on February 3 and a relentless march up to the 1.618 target this week. A retracement from this level would be understandable. Fifty percent (a very extreme retracement) would take the market down to 1265 or so.
But even if we were to go so far, a bullish pattern like this is infrequently done at the 1.618 Fibonacci target. The next level, somewhere down the line, would be 2.618, and that would take us above 1500.
Bounced off that minor Fib level around 1.0712 on Wednesday. Think it ain't going to hold the second time we get there.
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