The month of November was been a positive one for the broader market, but it was also one that sent a number of mixed signals. The first week saw a sharp jump in the indices followed by a gap even higher to start the second week. But that gap-up day turned decidedly negative by the end of the trading session. We wrote this article about the negativity of the daily candles. The market dipped the following day but then continued on its upward path. One week later a bearish eveningstar top formed on the daily index charts. We highlighted that reversal formation and once again, the indices dipped briefly and then made new highs.
The point is that, as always, the market sends false signals as it does its best to prevent traders from divining its movements. That brings us to todays commentary. It is simple, we have reached an important point in the Fibonacci time sequence when measured off the 2009 low. If we begin measuring the fabled sequence off the low made in 2009 on the weekly charts, we find that we are 233 weeks from that point. That is the 13th Fibonacci time zone. (for more information on Fibonacci measurements this is just one of many resources online.)
At this point it is impossible to say what reaching this Fibonacci way-point means for the market. Like all technical trading tools it must be followed by a period of confirmation. In most cases, the more esoteric the trading tool the less likely, in our opinion, of any meaningful affect on the market. That said it is important to be aware of all the signals the market sends, and to factor them in to your trading plan.