The Fizzle Point

I fizzled out in early March: inexplicable, terribly sudden disappearances are a bad habit of mine. But really, it’s tax season, though it isn’t about my own taxes. I’m not a CPA, and I do not work at an accounting firm. I’m not a quasi-CPA, bookkeeper, in payroll, etc. All the same, though…. Anyway, I think my spate of early-Spring sinus infections has ended, and my blogger batteries are recharged. So, until they die again….

This is a bit different: every now and again, I dip into the equity side of things, especially as there is occasion to call a reversal and gratify a barely latent desire to prove I’m right that is constantly nagging at me. Well: that’s only half-true.

A few things of note:

The next round, psychological markers occur at 850, 900.

Fibonacci Projection is the topic of the red Fib levels on the right side of the chart (ignore the blue fib levels, though they are an example of the same thing). The red fib lines in the middle, from 800-933 (real body low – real body top) measure a swing low to swing high. The red fib lines are a projection that correlates to the previous move: in fact, you’ll notice 681-816 (again, real bodies, on the weekly) is almost exactly the measurement of the previous swing. Taking the symmetry of those moves as an embarkment point, we can project likely reversal points on this move by measuring 127.2% and 161.8% of 133 (or 135) points. These projections hit at exactly 850 and 900.

AFP registers lower forkline resistance at ~850, median line resistance in the 900 neighborhood.

And (not pictured here) 78.6% fib retracement for 875-666 comes in at 830, a couple points away from where the index topped out Friday (that correlates to 7920 on the $DJIA).

There are a few positive divergence-type items around that make this a little tentative (the time to get very uneasy is when all points of your analysis are completely unanimous), but I do think the best staging point for bears to bring supply back in falls between 830 and 850-900. That’s a broad range, so if pressed I’d collapse it to 830-850ish. Unless there’s significant dislocation to the upside, this remains a bear market rally that I think is just about spent. Above 900 would cause some real head-scratching, and the corrective scenario isn’t really called into question until 1015+.