Retracements Matter Here
The S&P 500 is clearly in a downtrend. A key tool to track the downtrend is the retracement tool. In this case, we are tracking the retracement on the S&P 500 from the February low to the September high.
There are four retracement levels. The first is the 38.2% retracement which on the S&P 500 is 2782.41. The second level is the 50% retracement which is 2734.72. The third level is the 61.80% retracement which is 2687.04.
Currently, the S&P 500 has been testing this level the last four days. It has closed below on three of those days which indicates that a 100% retracement to the February low could be in play. That number is 2532.69.
Yesterday on a intraday basis the S&P 500 got as low at 2628. A move to the February low would probably concluded the downside action unless the S&P 500 just sliced through this level which seems unlikely. Pay attention.
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