Yesterday, the S&P 500 rallied to 3130.94, filling a March 4 gap and reaching the all-important .786 Fibonacci retracement level, a common reversal point for second wave trends.
Fibonacci, the math behind of the Wave Principle, is used to define turning points. The essential Fibonacci ratios used in recognizing wave retracements are .236, .382, .500, .618 and .786.
The best third waves originate from deep second waves. A .786 retracement is optimal.
Meanwhile, the Dow rallied to 26,337.70, filling the March 5 and March 6 gaps. The next gap is 27,090.80, a .786 retracement.
In the event the current push is Minor wave 5 of Intermediate wave (C), there's a good probability of a push to 27,090, 27,139, or 27,542.
This would be a strong signal Primary wave 2 (circle) in stocks was complete.
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