Assuming a normal retracement pattern, your 10% gain will be wiped out before year-end.
We will be using the midpoint of the support zone to calculate retracement levels.
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Forbes contributing writer Tom Aspray discussed the use of Fibonacci retracement levels a few days ago.
This retracement support also corresponds to the chart support from the latter part of August.
The 38.2% retracement seems to coincide with one possible end-point for the minor fifth wave.
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The pull-in only came into shallow retracement levels, and macro bullish composure remains intact.
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The correction retraced 57% of the prior rally, holding above the 61.8% retracement support.
The 20 day is around 1331 and the 25% Fibonacci retracement stands at 1320.
The 38.2% Fib retracement and the floor from January 30ths comes in around 1300.
The Fibonacci retracement levels can be used to determine both entry and exit levels.
Though the 61.8% retracement resistance was overcome, GDX is still below its former uptrend, line c.
This corresponds to the chart support, as well as the 38.2 and 50% retracement support levels.
Another strong day or shallow retracement today would give the bulls more credibility on this move.
In order to see if the bounce can continue you need to measure the retracement.
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The 38.2% Fibonacci retracement support is at 532.80, with the 50% support level at 520.60.
Yesterday, the market held the 1183 level, which is the 50% retracement zone from highs.
Others point to some technical chart developments that suggest gold is due for a retracement.
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The major 38.2% Fibonacci retracement resistance has been overcome, with the 50% resistance now at 581.
The second chart below shows how the recovery to the 61.8% retracement level unfolded in three waves.
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The Dax has reached the September 2012 highs, with the 38.2% Fibonacci retracement support to follow at 7, 246.
Therefore, if this retracement support is reached, it would be just over a 10% decline from the highs.
Another reason I like retracement analysis is that you are able to develop several well-defined potential profit levels.
The potential for a retracement, combined with building technical resistance, may force cruise stocks to re-chart their course.
The PowerShares QQQ Trust ( QQQ) violated its daily uptrend and the 50% Fibonacci retracement support last week.
The next big zone will be the 50% retracement and the 50day moving average in the 1320 area.
We did hold the 38.2% retracement, but in this fast-paced, back and forth market, we lost crucial momentum.
The 38.2% retracement resistance from the August 2011 highs is at 82.70, with the 50%R resistance at 89.
The rebound from this low briefly overcame the 61.8% Fibonacci retracement resistance in the middle of September.
It is a good example of why Fibonacci retracement analysis can be used a good risk management tool.
That level for Apple happens to be very close to the 61.8% retracement level shown in the prior chart.
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