Barry Ritholtz over at The Big Picture points out in a recent post that the Dow has now reached a 50% retracement of the 10/02-10/07 bull market. Fibonacci retracements are a form of technical analysis that typically act as support levels in the near term. Retracements of 23.6%, 38.2%, 50%, 61.8% and 76.4% are the support levels that traders look for, and as shown below, the 23.6% and 38.2% levels have acted as short-term support during this bear market. As The Big Picture notes, "the 50% retrace is where one would expect to see some sort of rally."
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