Broad Market Index Testing Broken “Must Hold” Level

(Before It's News)

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zerohedge.com / by Tyler Durden on 02/20/2016 – 15:10

Via Dana Lyons Tumblr,

The broad NYSE Composite stock market index is testing the level we deemed “must hold” – that broke in January.

Back on January 8, we posted a chart illustrating that the broad NYSE Composite was at a “must hold” level, in our view. Signifying the confluence of 3 major post-2009 bull market Fibonacci Retracement lines, we considered the area around 9600 to be critical for the NYSE to hold. Specifically, these lines lay in the vicinity:

• The 23.6% Fibonacci Retracement of the 2009-2015 rally
• The 38.2% Fibonacci Retracement of the 2011-2015 rally, and
• The 61.8% Fibonacci Retracement of the rally from the early 2013 breakout level to the 2015 high

And while our analysis identified significant potential support, there were 2 things that suggested to us that, sooner or later, that “must hold” level would fail to hold. First, the NYSE had tested that level already in August and September, holding successfully. That event had likely “softened” up the potential support at the 9600 level.

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