By David Banister
NEW YORK (MarketTrendsForecast.com) -- The S&P 500
is likely to pullback from a 66-point rally off the 1343 pivots. Those pivots were right at a Fibonacci fractal retracement of 61.8% of the summer rally. That rally ran from 1267-1474, as we all know in hindsight, and the correction was a normal correction within a bull cycle.
Near term, we had a nice run to 1409 and met resistance there. We would expect a pullback to the 1384 areas on the S&P 500, if not a bit lower in the coming days. The U.S. dollar is likely to get a bounce, which will also pull down precious metals along with stocks in the near term.
We think this could be a opportunity to buy as we approach pivot pullback buy points, but of course we will monitor in the event the pullback becomes more dire than expected.
Below are charts of the US dollar and the S&P 500 index and potential near-term movements to monitor. We closed out long positions in Direxion Shares Exchange Traded Fund Trust
) with nice gains Tuesday as well as stocks with trading profits while we watch the pullback action.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.