SP500 Sept 17, 2012 - Fibonacci Extentions

Todays daily chart is a good example of using Fibonacci extentions.  This is based on the swing low from April 2, 2012 to June 4, 2012. I am looking at the 78.6% and 127.2% retracements.

78.6% is the square root of 61.8% and 127.2% is 1.618% * 78.6&.

Once the market breaks above the 78.6 retracement on July 30 that makes the target the 127.2. In our example today we have now reached the target on Sept 14 and should be out of the trade. If the 127.2% extension is broken to the upside then the target is 161.8% at 1521 for the SP500. Normally I would say this trade is over but with the recent FED moves we are in unknown territory where the 161.8% retracement may be reached. Watch closely.

Another chart I'm watching closely is the 4year cycle chart. The 4 year cycle bottomed march 6, 2009. The 4 year cycle is normally composed of either 2 or 3 cycles. The current 4 year looks like it is divided into 3 15.5 month cycles which would put the end at late Dec 2012 or early Jan 2013. Note, the last cycle of any larger cycle typically distorts. Many cycle analysts would give the 4 year cycle a range of 3 months either side. This means we are in the range now and will look to other cycles and techniques to fine tune the location of the low.

It is possible this was an extremely short 2 phase where the 4 year cycle ended Oct 4th. It did break through the 23 month average which is one requirement for the 4 year cycle low.

At this point I think it is still to come, perhaps after the US elections.

This week should be very active with Pluto turning direct (Sept 18), the long term Uranus Pluto square (Sept 19) for the second time and  Mercury translating both on Sept 20. Social unrest, violence and debt problems should all be in the fore. The following week we have Mars transiting over the point of the upcoming Nov 13, 2012 total Solar eclipse. The next 2 weeks could have geophysical events as well.