S&P 500: Headed lower?
Since this "miracle" rally began after Christmas, many investors have wondered when shorting seems like an option. In my opinion that time has pretty much arrived. Of course during this rally there were some small short opportunities but then again trading against the trend can be tricky and costly aka "The trend is your friend".
On the other hand we have of course the full saying "The trend is your friend until the end when it bends". In my opinion that bending has pretty much started.
As seen in the chart after the new ATH it started a decent, making the DMI's cross and tipping the SAR in "reverse". Now the SAR isnt always perfect so generally I wait a few days for confirmation just like the ADX/DMI because technically the ADX needs to be above 20 to be "trending".
After a few days it dipped below the Wilder's MA and staying below that even after a short "bull" move. In the same period the DMI- showed that negative pressure still had the high ground even after a couple green candles.
Now that the ADX line reset itself I think we can see the start of a new trend more clearly.
First of all a break through the 2800-2820 zone would be best since that this area has some history of being a "sup/res" point. After that is completed I expect it to drop about a 100 points tot the 2700-2720 area. That would be more a psychological barrier but has some ground as support. Finish that I think a target at 2600 would be reasonable.
Any questions or comments feel free to do so. Please keep it civil!
Other than that I wish you Happy Trading.
Disclaimer: Use this analyses however you want, but don't come knocking on my door for your losses. Trading this would be your own risk and I'm not obligated to take responsibility for that.
On the other hand we have of course the full saying "The trend is your friend until the end when it bends". In my opinion that bending has pretty much started.
As seen in the chart after the new ATH it started a decent, making the DMI's cross and tipping the SAR in "reverse". Now the SAR isnt always perfect so generally I wait a few days for confirmation just like the ADX/DMI because technically the ADX needs to be above 20 to be "trending".
After a few days it dipped below the Wilder's MA and staying below that even after a short "bull" move. In the same period the DMI- showed that negative pressure still had the high ground even after a couple green candles.
Now that the ADX line reset itself I think we can see the start of a new trend more clearly.
First of all a break through the 2800-2820 zone would be best since that this area has some history of being a "sup/res" point. After that is completed I expect it to drop about a 100 points tot the 2700-2720 area. That would be more a psychological barrier but has some ground as support. Finish that I think a target at 2600 would be reasonable.
Any questions or comments feel free to do so. Please keep it civil!
Other than that I wish you Happy Trading.
Disclaimer: Use this analyses however you want, but don't come knocking on my door for your losses. Trading this would be your own risk and I'm not obligated to take responsibility for that.
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