After the recent GDP growth disappointment, I believe the market has priced in the news adequately. A correction is due on the sell-off, which is confirmed by the technical indicators in the chart. Most obvious is the support trendline
analysis, coupled with the Fibonacci level, which combines to give solid support. However, the bounce is expected to be short-lived. RSI
and moving averages have bearish
indications, implying a strong downtrend is underway. An Elliot Wave
analysis confirms this, we are seeing the beginning of wave B of the Elliot
Correction. We look to the next Fibonacci level for potential resistance, which I think will also coincide with the moving average lines to provide solid resistance. Finally, the bounce will end and we will observe the final wave of the correction (wave C) potentially up to the Fibonacci 0.5 level, which happens to also be a support trendline
. Given the major support/resistance
levels line up with each other, I believe this is a good trade to take, with potential stop losses at your appropriate risk-level.