ES at the $5,150 Critical Level: Fibonacci 50% Retracement

The weekly chart of the ES shows that the price action is currently retracing to key Fibonacci levels, with the 50% retracement zone sitting around $5,150. Historically, this mid-point retracement has been significant—as it often marks a confluence area where buyers step in and support emerges. In past cycles, when the ES has retraced to a similar 50% level, it has frequently served as a bottom, with momentum indicators (such as the divergence signals and MACD) confirming a reversal.

In the current setup, the presence of negative divergences on the momentum indicator suggests that, despite recent price declines, the selling pressure may be beginning to wane. Additionally, any potential bearish crossover in the MACD could be the last sign of weakness before a turnaround. When similar conditions occurred in previous recession-linked corrections—where fiscal stimulus or other external supports had temporarily masked underlying issues—the eventual unwinding of those supports led to a consolidation near these Fibonacci levels before a recovery ensued.

Given this historical context, a drop toward the $5,150 level could represent a critical turning point. If the ES finds strong support at this level, mirroring past instances where the 50% retracement served as a bottom, it might signal the exhaustion of the downtrend and set the stage for a rebound. This technical confluence—Fibonacci support, divergence signals, and MACD cues—suggests that the market is at a juncture where previous stimulus-driven recoveries eventually gave way to bottom formations, which could be repeated in today’s environment.