The markets appear to be completing a near term correction. I use Fibonacci Retracements to identify potential reversal levels. These ratios are found in the Fibonacci sequence and we probably don’t need to get into the definitions. The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%. After an advance, chartists apply Fibonacci ratios to define retracement levels and forecast the extent of a correction or pullback.
I’m therefore moving to the yellow flag…….Caution. Should the S & P 500 move below 1908 then the red flag would be back in place.
It’s important to recognize that the markets appear to be very tired. Young investors can take more risk than older investors and I would encourage older investors to sell their weak stocks and put tight stops on their stronger performing issues.