Consumers Are Still Insecure

Consumer confidence came in less than expected. Personally, this was somewhat of a surprise, because I thought with the recent rise in the stock market and lack of "bad economic press", it would have translated into higher consumer confidence levels.

The stock market internals have weakened, as expected. We are very close to taking out yesterday's lows. Today's close will be critical, because there is a reversal pattern forming on a daily chart.

It is no surprise that the stock market is selling off today, given its two week parabolic move higher. The MACD's were warning us yesterday, as there it was diverging from price. Think of it like the smoke that preludes a volcanic eruption.

Fibonacci retracements are a great tool to utilize when you have parabolic movements in price. Given the strength of the move, you typically get retracements to the 23% and 38% levels before resuming trend.

Below, is a chart of the /ES with the Fibonacci retracement levels drawn from the lows of July 13th (the start of the bull run) to yesterday's high.

My first price target on the /ES is around the 955 level. There are other confirming signals around that level which may act as support.

• The 955 level is around the previous resistance level (953).
• There is price congestion around that level, as noted on the chart below.
• The hourly 200 simple moving average (SMA) is approaching the 955 level.
• The 23% Fibonacci retracement level is also around the 955 level.