Chart of the Day - Thursday, April 15th, 2021

Today’s Chart of the Day was shared by Matthew Timpane (@mtimpane). It's a chart of the S&P 500 ETF, $SPY, over the past 14 months. Matthew points out that the S&P 500 has reached the 161.8% Fibonacci extension of the Feb-March 2020 decline. You may be wondering - what the heck is the significance of 161.8%??? It's known as the golden ratio, and it's the result of dividing any number in the Fibonacci sequence by the preceding number. For whatever reason, these Fibonacci levels often act as resistance when price is in uncharted territory like this. After an incredible +80% rally from the March 2020 low, could century-old math be suggesting the S&P 500 is due for a pause? In a comment to The Chart Report, Matthew said, "It's tough to say anything that is potentially bearish right now given how strong the trend is. Maybe it's only a pause. But, we should be aware nonetheless, so we’re not caught off guard if something does happen.