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There’s one level I watch more religiously than any other when I’m analyzing price action…
The 61.8% retracement.
It’s not just another Fibonacci level. It’s the line in the sand that helps me decide whether to position for trend continuation or prepare for a reversal. As long as price stays below the 61.8% level after a decline, continuation lower remains in play.
Break above it with conviction, and the probabilities begin shifting toward recovery.
That makes the level especially useful at inflection points, but I never treat it as a signal in isolation. I want to see how price closes around it, whether momentum confirms the move and what the larger time frames are showing.
How Time Frames and News Shape the Setup
The major indices recently demonstrated this process. The S&P 500 (SPY) pushed into 61.8% resistance and closed slightly below it before rolling over late in the session. The Nasdaq 100 (QQQ) also reached its 61.8% retracement after a three-wave decline and a three-wave recovery, creating a clear decision point.
The next step is to compare time frames. A 5-minute rejection may produce only a brief pullback, while a 4-hour failure can activate a much larger daily-chart objective.
In one recent setup, failure at the 4-hour 61.8% level opened the possibility of a daily extension toward 7,100. When shorter and longer time frames agree, the setup has historically offered clearer direction and better-defined risk.
When they conflict, I reduce conviction and wait for confirmation.
Fundamental news adds another layer. United Wholesale Mortgage (UWMC), for example, reported a loss of nearly half a billion dollars. News like that can accelerate an existing technical breakdown, but price may also hold support despite a negative headline.
That divergence matters.
If bad news cannot force price below the 61.8% level, sellers may be losing control. If the level breaks with expanding momentum, the news and technical structure are aligned.
One Framework Across Multiple Markets
The same pattern appeared in individual stocks. Caterpillar (CAT) failed to clear the 61.8% level, leaving room for another step lower. Teradyne (TER) met similar resistance, while Super Micro Computer (SMCI) sat directly beneath its 61.8% retracement. A close above that level favored a move toward 1,180, while another rejection kept downside risk alive.
Apple (AAPL) also recently retraced into its 61.8% zone after reaching a prior target. That area became the make-or-break point between a renewed bounce and further weakness.
This framework isn’t limited to equities. The U.S. dollar/Japanese yen currency pair (USD/JPY) held its 61.8% retracement, creating a measured-bounce setup. I apply the same logic to indices, forex and commodities because the level reflects a recurring market decision…
Has enough of the prior move been retraced to reverse the trend, or is the original direction about to resume?
Today, pull up a significant move on your own charts and mark its 61.8% retracement. Then compare the intraday, 4-hour and daily structures. The level provides the reference point, but the close, momentum, time-frame alignment and surrounding news determine the trade.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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