Monday’s gap down was short lived as the bulls took over once again. As we move higher week after week, we continue to harp on the Fibonacci levels and targeted support and resistance. The S&P pulled right back to the 38.2% Retracement Monday before moving higher.
The Fibo 38.2%, 50.0% and 61.8% are the most commonly talked about areas, as these tend to act as the strongest resistance points when drawing a retracement. Fibonacci lines can also be looked at using extensions. A 121.7% and 161.8% retracements can be used as price targets in breakouts.