Retracement Levels

As stocks and indexes dropped they fell through what are called retracement levels. These levels take a move from a low to a high and then determine the normal pullback levels. These levels are 38.2%, 50% and 61.80% and the dreaded 100% pullback.

The two retracement periods we are watching are the November low to the January high. Also, I believe that the longer term October 2002 to October 2007 high. Tje November to January period see the Dow Jones and S&P 500 having broken all retracments. The S&P 500 needs to gete back above 741.02 and the Dow Jones Industrial Average above 7392.41. A plus is the NASDAQ Composite and S&P 400 are above their 100% retracement levels.

The longer term retracement level on the S&P 500 is 768.63. The Dow Jones Industrial Average 100% retracment is 7181.47. The longer term retracments have not been taken out on the NASDAQ Composite or S&P 400. These levels are 1108.49 and 370.83.