Could our past impact the future? First off let’s see if it has in the past!
The above chart is a long-term view of the S&P 500. 1974 was a key low, it took place around the time President Nixon was impeached. Most are aware that that a very sharp decline took place in 1987. I applied Fibonacci to these key lows and found that the financial-crisis low in 2009 took place right at the 423% Fibonacci extension level, based upon these key dates.
In the chart below I did something similar: I took the S&P 500 and applied Fibonacci to the 2007 highs and 2009 lows.
As you can see above, the S&P 500 is right now facing the Fibonacci 161% extension level (1) based on the key high in 2007 and low in 2009. And that level has the potential to become resistance. Watch the price level closely. In my humble opinion, we'd see an important breakout if the S&P 500 cracks the 161% level.
In the chart below, I applied the Fibonacci to the same dates as the S&P 500 above (2007 high/2009) lows.
As you can see, once the Russell hit the 161% zone it became resistance for about a year. Lately the Russell works on a breakout of the 1-year sideways choppy pattern. Consider a break above that level a positive.
Bottom line – The S&P 500 is presently facing a key resistance point, based upon key levels in the past. Resistance is resistance until broken if broken. If a breakout takes place, the next key Fibonacci extension level is a large percentage above current prices.