Reaction to the 50% Correction Level

One of my favorite charts to watch is the S&P 500 Index 60 Minute chart. It is a good chart to use to look at Fibonacci Levels.

Another explanation for Friday's narrow range is that the market is reacting to the 50% correction level of the CD Swing Wave. Traders are aware of and pay attention to this level, and watch the market's reaction to it. Another way to look at this is that most traders want someone else to cross that line.

An argument can be made that the 50% correction of the AB Swing Wave was more bullish by the fact that the B point did not close below the previous pivot at E; whereas, D was a close below the pivot at B. Technical traders maybe thinking that the market should trade down to complete the CD symmetry to the downside. At the same time, the market is showing cash accumulation of the equity market lately. So, we have a temporary stalemate between bearish, technical traders and perhaps bullish, longer-term investors.

We will have to wait to see which side is stronger.

Charles