Based on time-Fib analyses, as well as using Fib-extensions at 3 different wave degrees and Fib-retraces at 2 different wave degrees, Intelligent Investing members had already for weeks a 2030-2050 target zone for the SPX set for September 17. The market topped less than half a percent below this level on the day. Now we are looking for a lower low in the coming weeks. Using only observable evidence, many different charts are analyzed, from the monthly to hourly time-frame. This aids in determining the best and most probably targets most successfully. As such, please find below one of many charts I.I. uses. Here we simply look at trendlines, SMAs and resistance levels.
The arrows with the numbers showed the important hurdles the bulls needed to take over the past weeks in order to see price rice. The first, 1) was that the 10d SMA and black dotted ascending trendline needed to hold, as it did last Monday. The second, 2) is that price needed to get above the 20d SMA, which it did last Tuesday and then 3) get above the red dotted descending trendline. The bulls also accomplished this last week. However, then the next resistance would be 4) the purple dotted descending trendline as well as 5) the 2020 resistance zone. As we know now, this was too much for the bulls to overcome and price fell back below the red and black trendlines: what once was support now becomes resistance. Namely, today price retested both trendlines from below and failed. However, price is still above the 10 and 20d SMA, which need to hold to prevent further downside.
Regardless, we expect further downside and using the maximum advance since the SPX 1867 low made on August 25th, to SPX 1993 on August 28 (up to the red trendline), we can use this 126p advance as our likely downside target based on time and price symmetry. This then targets: 1980 (today’s high) – 126 = 1854. Interestingly enough, this is also the daily S1 level (not shown), falls within major trendline support and S/R levels (not shown).
That’s all there is to it using this chart.
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