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After a steep move up we have several indications that a reversal in
SPX
is due.
1) We have strong believe that move started 24-Dec-18 is corrective to the down move started 3-Oct-18. Completing a move below 2349 level will form a big corrective structure of ABC (WXY) form, correcting the several year uptrend from 23-Feb-2009.
2) Current levels for -0.23Fib extension level since the small midway correction 22-Feb till 22-March
2) The latter has a clear 5 Impulsive Elliot wave structure supported by RSI and MACD divergence on weekly chart.
3) RSI and MACD divergence on 4h chart
4)
SPX
reversals in many cases reveal at or shortly after option expiration and rollover date 30-Apr
We are still in a corrective mode since 3.10.18. If this is true we will witness a correction dow to 2220 levels (-0.23 Fib level) within next 3-4 months
This is about 23% correction. It will not happen in one impulsive straight line. A consolidation can be expected at levels about 2560-2500
The move can start as soon as today of within the next two weeks.
Invalidation to the forecast is a strong move above 3000 level (a trendline connecting previous tops). Move above the previous high of 2944 is still inconclusive as it can form a running flat pattern all the way up to 3000 level.
Once the reversal starts
SPX
tends to exhibit steep and quick movements to the south.
To be prepared for it a possible trading strategy is buying an inverse
SPX
following ETF (like
SH
). Once the reversal is confirmed a leveraged ETF can be used like
SDS
for the rally. They both are non EU compliant so a UCITS compliant ETF (like
XSPD
) can be used for EU traders.
-
SPX
shows signs of reversal
- Although current move is quite steep, the move is still corrective and not impulsive
- Significant fibonacci levels achieved
After a steep move up we have several indications that a reversal in
SPX
is due. 1) We have strong believe that move started 24-Dec-18 is corrective to the down move started 3-Oct-18. Completing a move below 2349 level will form a big corrective structure of ABC (WXY) form, correcting the several year uptrend from 23-Feb-2009.
2) Current levels for -0.23Fib extension level since the small midway correction 22-Feb till 22-March
2) The latter has a clear 5 Impulsive Elliot wave structure supported by RSI and MACD divergence on weekly chart.
3) RSI and MACD divergence on 4h chart
4)
SPX
reversals in many cases reveal at or shortly after option expiration and rollover date 30-Apr We are still in a corrective mode since 3.10.18. If this is true we will witness a correction dow to 2220 levels (-0.23 Fib level) within next 3-4 months
This is about 23% correction. It will not happen in one impulsive straight line. A consolidation can be expected at levels about 2560-2500
The move can start as soon as today of within the next two weeks.
Invalidation to the forecast is a strong move above 3000 level (a trendline connecting previous tops). Move above the previous high of 2944 is still inconclusive as it can form a running flat pattern all the way up to 3000 level.
Once the reversal starts
SPX
tends to exhibit steep and quick movements to the south. To be prepared for it a possible trading strategy is buying an inverse
SPX
following ETF (like
SH
). Once the reversal is confirmed a leveraged ETF can be used like
SDS
for the rally. They both are non EU compliant so a UCITS compliant ETF (like
XSPD
) can be used for EU traders.
Trade active:
Hello traders, recent days market gave us a few confirmations on the idea:
- A shy, short lived breakout and a quick retrace from the top.
- fall is quicker and deeper from the previous retracements. In the pre trade session it Is is still within the trend, but pushing the boundary and expected to cross it today.
- MACD created another divergence signal on daily chart on May 2nd.
First stop is expected at 2805 level (EMA 200 and Fib 0.236 level)
- A shy, short lived breakout and a quick retrace from the top.
- fall is quicker and deeper from the previous retracements. In the pre trade session it Is is still within the trend, but pushing the boundary and expected to cross it today.
- MACD created another divergence signal on daily chart on May 2nd.
First stop is expected at 2805 level (EMA 200 and Fib 0.236 level)
Comment:
Idea updated here
