Don’t believe in the power of Fibonacci price levels? Perhaps this two-pack of stock market charts will change your mind.
Back in late December, I warned that we were approaching the 261.8 Fibonacci resistance level on the Dow Jones Industrials:
“We are now at the 261.8 Fibonacci price level. Will this level bring market turbulence… sideways, lower, etc… ? Stay tuned.”
So what happened after hitting this level? Well, all kinds of win streaks ended and both the Dow and S&P stopped on a dime! Market volatility picked up and investors saw the quickest 10% decline in history from all-time highs. Will this become a “wall of resistance”.
The exact same thing occurred on the S&P 500 chart further below. Coincidence?
Once this level was hit, both the Dow Jones and S&P 500 produced “hangman” candle patterns the following month (February). Yes, bulls may have trouble tearing down this wall of resistance!
Dow Jones Industrials – 261.8 Fibonacci “Wall”
CLICK ON CHART TO ENLARGE
View our most recent webinar multi-decade patterns in play and how to take advantage