Using parterns, traders feel more confident to counter trend with a very limited risk.
About 1-2-3-4 label, there is a helpful explain about support becomes resistance: http://www.investopedia.com/articles/trading/06/supportresistancereversal.asp
Looking closer to minor structure, It is coincident that fib channel lines also act as supports and resistances, so why is that? some believe because of market psychology, people like placing trade at these levels (trigger buy stop, sell limit)... maybe so.
Comment: Global market meltdown leads to sell-off stock may continue, but now I stay aside and start looking for some potential stocks to hold.
Note: TA analysis on chart.
Thank you for your reading