Earlier this week, we highlighted how the NYSE Composite was breaking to new lows. Well, this week we are seeing follow-through selling.
This is a broad-based index so investors should heed its cautionary signal.
Joe Friday: “The facts, Ma’am. Just the facts.”
There are a few ways to look at the NYSE’s breakdown below the June low. First, we are now looking for a new low. Second, rallies may have trouble gaining traction. Why? Because, third, former price support is now resistance.
So the NYSE stock index is looking for a new “low”. Using Fibonacci price projection, we can determine the next Fibonacci price target.
Here we use the November 2021 high and the June 2022 low and apply a 1.618 Fib extension. That produces a target near the 12,000 level for the NYSE Composite. That’s 10% below current trading levels. Stay tuned!