Traders often look at choppy price action and fail to appreciate the rhythm of the markets and how this can aid a trade plan. Over the course of the past six months the S&P’s have had a series of 2 steps forward-1 ½ steps back repetitions that at first glance appear random at best. However a closer look shows the symmetry of the price swings that has formed in recent months.

The daily chart shows that since September the S&P’s have had 4 separate rallies that covered nearly the same distance. In each instance the markets rally from low to high covered approximately 90 points in the S&P’s. The current rally is looking eerily similar to each of the previous rallies mentioned here. If this current surge completes in a similar time and length…that will place the S&P’s at 1124. This is also a 78.6% retracement of the entire sell off.

Kevin Riordan

This entry was posted on Saturday, February 20th, 2010 at 11:50 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.