SPX Daily Chart Fibonacci Retracements

The bears thought they finally created an end to the historic and unprecedented near six-year rally but the bulls create an epic comeback the most robust short term rally in history. The SPX is up from the 1818 low to the near 2080 high in only seven weeks time; 36 days. The move is a ridiculous 262 points off the bottom in mid-October; a +14.4% rally. The SPX is moving up at a rate of +2.1% per week and up +0.4% every day day after day for nearly two months. In October the SPX was actually negative on the year. The central bankers are powerful and once the stock market started going over the falls the Fed stepped in to save the day and stage the recovery.

The blue lines show the Fibonacci retracements for the move lower from 2019 down to 1818. On the way up, price blew through the 38% and 50% Fib's but stalled at the 62% Fib, albeit temporarily, then boom, through the 62% Fib lighting the way to a 100% retracement which occurs; a textbook 'V' recovery.

Since price continues higher, adding on a 1.236 Fibonacci extension to the 201-point range (1818-2019), is 248 points targeting 2066. This was highlighted in a chart about one month ago but admittedly it is very surprising to see the 2066 and higher print. A 1.382 extension targets 2096. The argument can be made that price is not fully convinced it can remain above the 1.236 extension. Price is at 2075 but has been moving through the 2050-2075 range for the last three weeks and through 2065-2075 the last ten days exhibiting sideways indecision. If the bears are going to fight back now is the time. If the SPX keeps floating higher and a close above 2080 occurs, the 2096-2100 level and higher is very likely. Bears have to put their game face on and start pushing volatility higher to create selling pressure, otherwise, they will be slapped in the face into the end of the year.

The universal consensus is that stocks will move higher into the end of the year; the boat is fully loaded to that side. Stocks typically experience weakness this week due to tax loss selling so that is one tiny advantage for bears; also the minute and hourly charts hint at a pull back. The central bankers are powerful, however, and can choose to send markets higher at any time by waving their hand. Bears must hold the line here at 2065-2075 and prevent 2080+ at all costs, otherwise, the bulls will likely party into the New Year heading to 2100 and higher. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.