A Most Intriguing Number
In Tuesday's column, aptly entitled "Remember this Number," I highlighted the Fibonacci .618 retracement of the decline from the April highs to the June 4 lows. I wrote, "That .618 retracement level weighs in at 1362.92. Today's high of 1363.46 was only about 1/2 point higher. So maybe that's what today's rally was all about. Certainly, if that level marks the high for this bounce, that's what it's going to look like." And now, as the market collapses on the latest whatever, that's what it looks like.
It's noteworthy that on Wednesday afternoon, shortly after the Federal Reserve announcement (actually, it was after the pullback following the Fed announcement), the S&P 500 popped back up to a slightly lower high of 1361.57, about 2 points below Tuesday's high. From there it pulled back a bit into the close. That slightly lower high left a kind of double top in place, with the first high about half a point above the .618 level and the second one about 1.5 points below it. The net effect is it solidified resistance at the .618 level and suggested a top of some importance....618 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.