S&P futures are down about 7 points from Friday's close - having risen some during the overnight and then a steady smallish decline since then. Which should lead to a more subdued open than on last Friday when everyone was so excited about the jobs report. Considering that we are now back below our current possible resistance areas, without that upward momentum, it could be difficult for the bulls to get anything meaningful going today.
S&P 500 - Daily Chart - 3 Days
Friday morning opened up with a gap toto the upside - hit resistance at the Nov 1007 line, got through that and hit resistance again at the Fibonacci 38.2% Retracement line of 1014 and managed to get past that just a bit before losing steam and dropping back at the end of the day as folks took profits. I'm not posting a daily chart, but volume was up and was above the 45ma - which you want to see on an up day. FAS was still en fuego, up almost 8% for the day - over 30% for the week. I'll take it.
On the down side, MACD-H was down, again continuing the bearish divergence. And one measure of a successful move through resistance is that the resistance then turns to support - the yesterday's ceiling becomes today's floor. That didn't really happen on Friday, did it?
You'll notice on the intraday chart that I've drawn lines at 1007 (November rebound high), and at 1014 - the first Fibonacci Retracement line - where we would expect resistance and a reversal.
I've also drawn a new line at about 1021. I'm reading a very interesting book, Fibonacci Analysis (Bloomberg Market Essentials), which suggests that rather than using the ultimate high and low of the previous trend to determine the parameters for calculating the Fibonacci Retracements, that instead use the last pivot points before the previous trend high and low. Using this calculation, the Fib 38.2 comes out almost 1021. Slightly different than the 1014 achieved using the extreme high and lows. I don't know enough about the whole Fibonacci thing to evaluate whether this is valid or not, but I threw the new line up there to see if it works. At this point I would treat any reversal at a level between 1014 and 1021 as a Fib Retracement. My understanding though is that the Fib devotees really look for pinpoint precision - if the usual way of generating the Fib ratios comes out at 1014.14, they are looking for the reversal right at 1014.14 - not somewhere in a range sorta maybe if you squint with one eye close by. So we'll see.
I don't expect a really momentous day today. It's mid-summer, we've just finished a leg upward, and we have all sorts of resistance in our face. We'll see. I'm a big believer in "be careful what you wish for" LOL
It's a new week. Good Luck!