The S&P 500 is surging 0.6% in midday trade Friday, putting it on track to have its best week in more than six years, but has only retraced 57.1% of the previous selloff. The Dow Jones Industrial Average was up 161 points, or 0.6%, on track for a sixth-straight gain, and the best week since November 2016, but has retraced just 54.5% of its selloff. The S&P 500 fell 291.87 points, or 10.2%, from its Jan. 26 record close of 2,872.87 to the Feb. 8 low of 2,581.00, and has now bounced 166.55 points since. The Dow had tumbled 2,756.25 points, or 10.4%, from its Jan. 26 record through Feb. 8, and has bounced 1,500.79 points since. Technicians who use the Fibonacci ratio of 0.618%, also known as the “Golden Ratio,” believe that until a charted instrument retraces 61.8% of a previous move, it is still governed by that previous moves. Basically, despite the big bounces this week, the S&P 500 and the Dow would still be part of the previous downtrend until the S&P 500 closes above 2,761.38 and the Dow closes above 25,563.82. Meanwhile, with the Nasdaq Composite up 0.5%, and on track for its biggest weekly gain since December 2011, it has now retraced 70.66% of its Jan. 26-Feb. 8 selloff.
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