SPX has approach the lower channel while S&P futures has clearly break the lower uptrend channel(red) . If S&P break the uptrend channel, I reckon two circumstances is going to happen:
1) S&P will go sideway at the moment before it find a new direction like what happened in mid of April.
2) S&P fill the 2867 gap, before a new trend is formed.
Sideway
- the reason behind this reasoning is because on this date, stocks like MSFT, AAPL, AMZN and FB which has been leading the market all this while has shown reversal candlestick signal( Doji, Bearish Engulfing). They might take a rest or reverse downwards which will bring the market downward or sideway for the time being. However, if other sector like banking sector or airline sector can boost the market for this few days, which i think is unlikely.
- the support level for the sideway channel is 2990, which is a crucial support for the sideway movement to be valid.
Fill the gap
- There is a big gap to be filled. While market has rallied above .786 fibo level, a big retracement is a surprise before it propels higher.
- Filling this gap is very likely because .382 fibo retracement is around there as well.
- Elliot wave can also be a reference in this case. The last rallied seems like the evil 5th wave, which is going to trap alot of reckless traders. Therefore, I believe there is a possibility that the C wave is ahead of us now, before a new trend begins.
Conclusion
- I believe "FILL THE GAP" is more likely at the moment.
- Either way, it is going to be choppy trading ahead of us. Volatility will be high so be careful of the size of your trading position. Sell off your short term trade unless your entry price is "confidently" low enough while long term trade can be keep if your entry price is low enough.
- I do not think that taking the short side will bring you handsome profit so still, focus on the long side. The general trend is still uptrend, do not fight the FED. XD Until you find a firmer signal to support your short position.
1) S&P will go sideway at the moment before it find a new direction like what happened in mid of April.
2) S&P fill the 2867 gap, before a new trend is formed.
Sideway
- the reason behind this reasoning is because on this date, stocks like MSFT, AAPL, AMZN and FB which has been leading the market all this while has shown reversal candlestick signal( Doji, Bearish Engulfing). They might take a rest or reverse downwards which will bring the market downward or sideway for the time being. However, if other sector like banking sector or airline sector can boost the market for this few days, which i think is unlikely.
- the support level for the sideway channel is 2990, which is a crucial support for the sideway movement to be valid.
Fill the gap
- There is a big gap to be filled. While market has rallied above .786 fibo level, a big retracement is a surprise before it propels higher.
- Filling this gap is very likely because .382 fibo retracement is around there as well.
- Elliot wave can also be a reference in this case. The last rallied seems like the evil 5th wave, which is going to trap alot of reckless traders. Therefore, I believe there is a possibility that the C wave is ahead of us now, before a new trend begins.
Conclusion
- I believe "FILL THE GAP" is more likely at the moment.
- Either way, it is going to be choppy trading ahead of us. Volatility will be high so be careful of the size of your trading position. Sell off your short term trade unless your entry price is "confidently" low enough while long term trade can be keep if your entry price is low enough.
- I do not think that taking the short side will bring you handsome profit so still, focus on the long side. The general trend is still uptrend, do not fight the FED. XD Until you find a firmer signal to support your short position.