Oh no! Is the year-end rally stalling before it even starts? The S&P 500 is currently bumping its head against the most important hurdle! We have arrived exactly at the 61.8 Fibonacci retracement from the last big high. The signs are increasing that we might not experience such a strong November after all.

This is what the Halloween effect had promised us, at least in most cases. We were already quite weak on the chest recently. So the last few days – and thus the first days in November – were surprisingly strong.

But now the bulls are running out of breath. That doesn’t have to be it yet. It is hardly surprising that we are braking at the current level.

S&P 500 in the 4-hour chart The H4 clearly shows how decisive the 61.8 Fibonacci retracement can be: exactly at this point of the countermovement was the end today. „What a coincidence“ everyone says who don’t like chart technique. That we also have the open price gap above it makes the situation more difficult for the bulls.

However, this does not have to be permanent. On a 2nd attempt, the bulls could certainly also close the price gap. Especially if we remember how strong the prices have risen in recent days. 50 or 100 points should be easy.

On paper yes. But the market probably sees it differently. Anyone who had bet on further rising prices in this area in mid-October will now probably want to close his trade with as little loss as possible. This creates downward pressure. The chart also shows us this clearly today.

The 61.8 retracement of the last downward stretch was the wall against which the bulls failed today.

But honestly, that’s a bit of eye-washing. The Fibonacci stretch in the chart that you can see is not from the summer high, but from the high in September. If we use Fibonacci at the high in July, we get a completely different number at the 61.8 retracement: 4,418 points!

Then the price gap would also be closed if we reach this mark. Seen in this way, we take the small correction in the ongoing rally as it comes today. But ultimately we don’t even have to doubt that this increase can’t be set.

Higher is always possible. You should already know that with the S&P 500. The RSI below the chart shows a break to the downside, but we are above the average lines EMA 50 and EMA 200. So we don’t have any tailwind from the trend for this possible short trade. That’s why the current correction can only be short-lived.

Apart from that – after such a strong week, it is quite legitimate if investors take a handful of profits today. But the year-end rally is not over yet!