Watch those 61.8% extension levels

We just published this week's Charted Market Insights. The report highlighted that the

61.8% Fibonacci extensions remain sticky as resistance across several major U.S. equity benchmarks.

The S&P 500 (SPX), S&P 500 Equal Weight (RSP), Nasdaq 100 (NDX), and NYSE Composite are all struggling against their 61.8% Fibonacci extension levels. These key resistance points stand at SPX 6476, RSP 189.44, NDX 23,824, and NYSE 21,179. Derived from prior rally legs, these extensions have capped upside momentum since mid-August, highlighting their technical significance as resistance to navigate with the SPX in the depths of its weakest 3-month period of the year (August-October) and looking ahead to the index's best period of the year (November-January).

A continued struggle with these 61.8% extensions, especially if accompanied by narrowing breadth or defensive sector leadership, would indicate potential exhaustion. In that scenario, focus shifts to the following support zones: SPX 6147–6100, RSP 182.23–179.95, NDX 22,200–22,000, and NYSE 20,300–20,100, which are backed up by 26- and 40-week moving averages. Holding these levels would preserve the longer-term bullish trend, even if near-term consolidation or a corrective pullback unfolds.

A decisive move above these resistance levels—confirmed by strong upside volume, broadening market participation, and leadership from cyclical sectors—would mark a resumption of the intermediate-term to longer-term uptrend. Such a breakout would open higher upside targets, such as the 100% extension levels, while reducing the probability of a deeper market retracement.

How to draw Fibonacci extension levels?

1. Identify the prior rally leg: In this case of the SPX (chart below), it is the up leg from the October 2022 low into February 2025 high.

2. Find the corrective low after that rally, which is in April 2025.

3. Project the October 2022 into February 2025 advance from the April 2025 low.

4. This gives the SPX a 61.8% extension at 6476 and a 100% extension at 7490.

5. Do the opposite in a downtrend: 1) Identify the prior down leg, 2) find the corrective rally high after that down leg, and 3) project the prior down leg from that corrective rally high to get the downside Fibonacci extensions.

Here's another example

The SPX achieved its 100% extension for the March 2020 into January 2022 rally, reaching this level at 6118 in January and February 2025 prior to a correction in April.