Provided you have been following the ONE44 Fibonacci rules and guidelines in all of our previous posts, you know the Golden Rule is,
38.2% is the single most important retracement and is the level we use for the "Golden Rule". This rule being, " any market that is going to keep its current trend must hold 38.2%". As long as it does the trend will continue and it should make new highs/lows from that retracement.
And this is what we are dealing with today, in both the NASDAQ 100 and Russell 2000.
Before we get to today, we are going to go over what got us here.Back on 5/1/22 we put out a post titled NASDAQ 100 10,800 target when they were trading up at 13,000. The low came in at 11,036 on 6/16/22 short of our target, but right on a major Gann square. Following the retracements after this, the first rally was just short of 23.6% back to the ATH on 6/27/22. We would have been looking for a new low from this level, however it stopped at 78.6% on 6/23/22 and following the ONE44 78.6% rule,
Any market that hits 78.6% should go 78.6% back the other way. This is also where a lot of Bull markets end and start.
So the first target on a rally from here would be 78.6% the other way and this happened on 7/7/22 and the break from there took it to 78.6% the other way again on 7/13/22.Going back to the 78.6% on 6/23/22 and the second part of that rule we do see it did indeed start of the next Bull run. It never violated the 78.6% level again.
Once it did clear 23.6% on 7/21/22 the next target was to look for 38.2% of the same move and this is 13,250 and as always we watch all the retracements on every move to see just how strong, or weak the market is regardless of the loner term target. As you can see on 7/26/22 that the first setback after taking out 23.6% held 38.2% of the current rally, always a positive sign. The rally from there took it up 1200 points right to 38.2% back to the ATH.
This brings us to today,
It had one close above 13,250, but the next day was right back below it. This is the long term swing point. Being 38.2% back to the ATH the long term target on a break from here will be new lows for the year. Always watching all the retracements, we will be watching 38.2% of the current rally at 12,500 to see if this leg up is over. Provided it holds, look for new highs for the move and a failure to hold this level should send it to the lows.
Taking out the long term swing point of 13,250 will give us a new upside target of 61.8% at 14,625.
The Russell 2000 hit 38.2% back to the ATH yesterday at 1950.00 and this is their long term swing point, below it look for new lows, above it look for 2145.00.
We did a post on the Dow Jones called 32,400 Top in Dow Futures, it is currently holding above their long term swing point of 32,400 and must continue to do so to remain positive. Back below it look for new lows.
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