How to determine how far a correction will goTo assess the extent of a market correction, I examine the price action around Fibonacci retracement levels and use the RSI for additional confirmation.
On the Comex Copper futures chart, the market has executed a 50% retracement and bounced significantly from that level. The RSI has corrected its overbought condition and is attempting to stabilize around the 40 level. I am optimistic about a potential recovery from here but will need further confirmation from either the RSI or the price action.
The RSI could still fall and test the 30 level. At this stage, we cannot rule out a 61.8% retracement, though a 78.6% retracement seems unlikely given the current RSI position.
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