As you know, markets rarely move straight up and straight down. The battle between buyers and sellers with differing time frames and objectives guarantee it will always be a challenge not get shaken out of trades. The S&P 500 looks like it will hit the 3800-3850 region soon. However, There is a strong possibility that we see a vicious countertrend rally at either the 4150 or 4050 regions. A strong rally from these regions could push it very quickly back to 4325 before continuing down to 3800.
How to trade this:
1) If you are not already short and would like to be,,, wait. Look to re-enter around 4325 if we see that. Shorting at this point is dangerous and even if you are eventually profitable on the trade, it will rob you of sleep at night.
2) If you are looking for a longer term long entry position, wait till we reach the 3850 region before pulling the trigger on your watchlist. There is is a real possibility that we could see further weakness down to 3200 level, so be judicious and begin dollar-cost-averaging from 3850.
How to trade this:
1) If you are not already short and would like to be,,, wait. Look to re-enter around 4325 if we see that. Shorting at this point is dangerous and even if you are eventually profitable on the trade, it will rob you of sleep at night.
2) If you are looking for a longer term long entry position, wait till we reach the 3850 region before pulling the trigger on your watchlist. There is is a real possibility that we could see further weakness down to 3200 level, so be judicious and begin dollar-cost-averaging from 3850.
Note
The whipsaw was more violent than expected. I'm looking at further selling to take place later next week. The 3850 level is still a strong pull for the market.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.