Black lines- Fibonacci retracement levels
The announcement of the higher than expected CPI numbers yesterday put a lot of pressure on stocks. SPX had reached as high as 4,150 area but soon after the announcement it plummeted initially towards 3,980 and during the day even lower. SPX reversed its short-term trend right below the key Fibonacci 61.8% retracement level. In our analysis we have talked many times about the increased chances of trend reversals around the specific Fibonacci level. Yesterday's price action confirms the importance of the resistance around 4,150. As long as price is below this level, we remain bearish looking for lower levels. Next support level is at recent lows around 3,886. Failure to hold above this level will lead SPX towards 3,600 at least.
