So far our Fibonacci price levels and timing ratios have called every move in the current index rally. For an example, we can focus on the current Dow cash daily chart:

Click on image to enlarge!

On March 29th, price closed above 12212, the .786 resistance retracement of the February 18th high to the March 16th low. Since that indicates that we should be able to reach the target at 12618, it’s much more likely that any pullback will be a corrective decline with higher highs to come afterwards.

From the Fibonacci time lines on the chart, we can see that there was a confluence of timing projections based on prior pivots which landed on the weekend of April 8th to April 11th. That brought our pullback, and the low of the recent decline actually held at the .382 retracement of the March 16th low to the subsequent high. That’s the level we’d expect to see hold if there’s still a great deal of interest in driving this higher. A further momentum consideration is the 50 CCI holding above zero at that point, equivalent to price holding above a 50 day simple moving average. In our intraday chat room, the YM contract also hit downside targets at precisely that point. The .382 retracement has now been updated to reflect yesterday’s high, and it’s reinforced by the 100 percent price projection of this recent corrective move. This means that even a similar decline would be just corrective in nature as long as this support overlap holds.

Going back to those time projections, we can see that the same set of pivots projects an additional overlap for this coming weekend. The Fibonacci ratios shown here are a more powerful combination than the earlier timing factors involved in the pullback. The more price extends upwards, the more likely it is that these timing factors will have a stronger effect on the market than what we saw in the prior corrective decline.

With similar nearby price targets and additional timing ratios coming into play next week on S&P, Nasdaq and Russell, the focus is on the strong possibility of a more solid high being established within the next few trading sessions!

For more from Mark including his “Chart of the Day”, visit MJBraun.net.