Fibonacci Time Zones for SPX May Show Possible Turning Dates
Primary Chart
Comment:
Correction / Clarification
On "Supplementary Chart 3: .50 and .618 Fibonacci Projections of the Entire YTD Decline," the label should read as follows: "Sept. 9-28, 2022 = key Fibonacci time zone showing *the .50 and .618 proportions* of the entire TIME of the YTD decline as projected from the June 17, 2022 low.
On "Supplementary Chart 3: .50 and .618 Fibonacci Projections of the Entire YTD Decline," the label should read as follows: "Sept. 9-28, 2022 = key Fibonacci time zone showing *the .50 and .618 proportions* of the entire TIME of the YTD decline as projected from the June 17, 2022 low.
Comment:
Fibonacci price relationships also support the idea of a turning point in coming days as suggested by the above Fibonacci time relationships pointing to August 9-12 as being important. Note the critical .618 retracement of the March 29-June 17 decline at SPX 4255.14 (SPY 423.91), just overhead. Further, the .50 retracement of the YTD decline lies at SPX 4227.75 (SPY 421.08).
Comment:
With reversal candles appearing across equity indices today, and crypto assets such as BTC, it may well be that the Fibonacci time analysis correctly flagged Aug. 9-12 as important for some sort of turn.
Comment:
Some dates mentioned in the original article appear to still be useful after the rally this week: Sept. 9-28, and late November too, for some sort of turning point. At this point, it's unclear whether the turning point would be upwards (from a decline between now and then) or downwards (from a continued rally).
But given that the rally appears likely to continue at least in the near term, and that short-term pullbacks will likely be bought in the near term (perhaps up to 4360-4370 SPX), it makes some sense to think that perhaps a mid-to-late September pivot will be a pivot downwards—this is just my best guess, but take it with a huge grain of salt :) Other technical evidence needs to align, but those dates can be watched for this potential as a turning point.
I don't trade off of Fibonacci time analysis alone, but just as *part* of the technical evidence for a trade setup. In other words, if Fib. time zones are present, along with price zones -- and then price begins a pivot as well violating some key levels, I might use Fibonacci time as *part* of my trade setup.
Note the limitations of this type of time analysis. Fibonacci time analysis remains less concrete perhaps than other forms of Fibonacci price analysis given the subjectivity in choosing highs and lows from which to measure. But it can be enjoyable to do and occasionally help locate key time zones for market turns.
But given that the rally appears likely to continue at least in the near term, and that short-term pullbacks will likely be bought in the near term (perhaps up to 4360-4370 SPX), it makes some sense to think that perhaps a mid-to-late September pivot will be a pivot downwards—this is just my best guess, but take it with a huge grain of salt :) Other technical evidence needs to align, but those dates can be watched for this potential as a turning point.
I don't trade off of Fibonacci time analysis alone, but just as *part* of the technical evidence for a trade setup. In other words, if Fib. time zones are present, along with price zones -- and then price begins a pivot as well violating some key levels, I might use Fibonacci time as *part* of my trade setup.
Note the limitations of this type of time analysis. Fibonacci time analysis remains less concrete perhaps than other forms of Fibonacci price analysis given the subjectivity in choosing highs and lows from which to measure. But it can be enjoyable to do and occasionally help locate key time zones for market turns.
Comment:
Here is one more chart (SPY, an ETF that tracks SPX) showing some of my updated and ongoing Fib. work. Nothing is guaranteed, obviously, but here are some dates that I'm looking at.
1. Aug. 22 (just after OpEx) = .382 x YTD decline projected from the June 17 low (some analysts call it a "time retracement" b/c it the levels work that way, but technically, time cannot be retraced, so I don't want to confuse with that term)
2. Sept. 9 = .50 x YTD decline projected from June 17 low
3. Sept. 28 = .618 x YTD decline projected from June 17 low
Note that a major 8-month downtrend line for SPX is only 1-2% overhead from today's close on 8/12. Price could pullback a bit given OB conditions, but momentum upwards probably continues near term— price likely at least tags that downtrend line soon, which is near 4300-4350 SPX (430-433 SPY).
Consider the blue-filled circle on the chart below, which shows an area right near both this downtrend line and the .618 retracement in PRICE of the entire YTD decline (January 4 to June 17). This lies at 4367 SPX (435 SPY).
1. Aug. 22 (just after OpEx) = .382 x YTD decline projected from the June 17 low (some analysts call it a "time retracement" b/c it the levels work that way, but technically, time cannot be retraced, so I don't want to confuse with that term)
2. Sept. 9 = .50 x YTD decline projected from June 17 low
3. Sept. 28 = .618 x YTD decline projected from June 17 low
Note that a major 8-month downtrend line for SPX is only 1-2% overhead from today's close on 8/12. Price could pullback a bit given OB conditions, but momentum upwards probably continues near term— price likely at least tags that downtrend line soon, which is near 4300-4350 SPX (430-433 SPY).
Consider the blue-filled circle on the chart below, which shows an area right near both this downtrend line and the .618 retracement in PRICE of the entire YTD decline (January 4 to June 17). This lies at 4367 SPX (435 SPY).
Comment:
The last update to this post mentioned August 22 was the .382 x the YTD decline projected from the June 17 low. It does appear that some sort of shift took place over the last two trading days with SPX down over -2% today. This does not mean SPX is heading back to lows immediately -- though it could be. It just means that it marked some sort of turning point in time where SPX is reversing in either a pullback or a trend change.
SquishTrade
Fibonacci proportions provide useful tools for working with price relationships and time relationships. The price relationships are perhaps the most familiar: price moves (swing highs to lows on various time frames) may be analyzed using Fibonacci retracements, extensions (of retracements), and projections. But time relationships can also be useful.
The primary chart, Chart 1 above, shows Fibonacci time relationships using tools available on TradingView. These Fibonacci time relationships have been applied to the S&P 500, a major global equity index based in the US.
Looking backwards in time to begin, the March 29, 2022 high appears to have been caught by the .50 retracement in time of the entire YTD decline from the all-time high on January 4, 2022, to the recent major low on June 17, 2022. Though not show, the major lows in March 2022 align well with the .382 retracement of the YTD decline.
Fibonacci Relationships Showing Importance of August 9-12, 2022
August 9, 2022, could mark the start of a time frame to begin looking for some sort of turn (pullback / retracement) in the S&P 500 (SPY). Undoubtedly, the beginnings of a turn yesterday ended up being a whipsaw. But several Fibonacci relationships, in fact, support August 9-12, 2022 being important in Fibonacci terms.
1. But August 9, 2022, equals the 1.618 extension of the March 29, 2022, to June 17, 2022 swing. It also shows the date that is .618 times the distance from March 29 to June 17 as projected from the June 17 low (which is a different way of expressing the same concept as a 1.618 extension of this time frame).
2. Coinciding with this date on August 9, 2022, is another Fibonacci time relationship marking Aug. 11, 2022. This time relationship is shown in the next chart below.
Supplementary Chart 2: Fibonacci 2.618 Time Projection
3. Another Fibonacci proportion shows that August 12, 2022, coincides with both of the other two early August 2022 dates with Fibonacci significance. This time relationship is shown in the next chart below.
Supplementary Chart 3: 1.618 Time Projection of the First High-to-High Cycle in This Bear Market
Fibonacci Relationships Showing Importance of Late September 2022
Additionally, a number of days in late September 2022 appear to have Fibonacci significance. See the primary chart, Chart 1 above. September 28, 2022, is a 1.618 time extension of the entire YTD decline. The other two Fibonacci vertical lines on either side of this date assume—perhaps incorrectly—that August 11, 2022, marks some sort of swing high that leads to a temporary pullback or perhaps a longer-term decline. An additional chart points to late September 2022 as having important Fibonacci dates.
Supplementary Chart 3: .50 and .618 Fibonacci Proportions of the Entire YTD Decline as Projected from June 17, 2022
Limitations of Fibonacci Time Work
Fibonacci time analysis remains less concrete perhaps than other forms of Fibonacci price analysis given the subjectivity in choosing highs and lows from which to measure. But it can be enjoyable to do and occasionally help locate key time zones for market turns.
This article attempts to apply Fibonacci relationships to only the most obvious swing highs and lows in the current bear market that began January 4, 2022. And it simply does not address whether lasting lows were made on June 17, 2022 or whether the index is destined to make lower lows and continue the bear market in coming weeks or months.