SPX - The Battle of the Bearish
Updated
The bearish are winning the battle for the new trend in the market. From Jun 2016 until October 2018 the price action remained above key moving averages trend lines, meaning "buying the dip" was by far the most profitable strategy those day.
Even more, we can say the bullish were under control in the market since the end of 2009, and only three times since then the market temporary loose his momentum, a for a couple of months we saw the price action below key indicator levels. What can we expect for the Fall 2018? Is it just the fourth exception in a long term trend, or it is the beginning of something new, a new trend where the bearish are going to dominate the market foe the next couple of years?
The good thing about building strategies with trends is that you find simple answers, to simple but important questions, and even more important is that the trend is consistently profitable, in any period of time, in any relativity liquid market.
And now, clearly, after all the supports broke, making new low every week, and seeing a strong volume "selling the rebound", and scary macroeconomics indicators for the american economy, the wiser strategy is to sell again after any rebound, and if you are a risky lover, then seeking shares with a high beta will be the best strategy to make $$$$ in the current conditions.
Entry levels to sell the S&P 500: light around the SMA 20 days (2650), aggressive around SMA 50/100 days (2700 level).
Stop loss: SMA 200 days (2760/2800).
Even more, we can say the bullish were under control in the market since the end of 2009, and only three times since then the market temporary loose his momentum, a for a couple of months we saw the price action below key indicator levels. What can we expect for the Fall 2018? Is it just the fourth exception in a long term trend, or it is the beginning of something new, a new trend where the bearish are going to dominate the market foe the next couple of years?
The good thing about building strategies with trends is that you find simple answers, to simple but important questions, and even more important is that the trend is consistently profitable, in any period of time, in any relativity liquid market.
And now, clearly, after all the supports broke, making new low every week, and seeing a strong volume "selling the rebound", and scary macroeconomics indicators for the american economy, the wiser strategy is to sell again after any rebound, and if you are a risky lover, then seeking shares with a high beta will be the best strategy to make $$$$ in the current conditions.
Entry levels to sell the S&P 500: light around the SMA 20 days (2650), aggressive around SMA 50/100 days (2700 level).
Stop loss: SMA 200 days (2760/2800).
Trade active
The second week of the year starts with interesting levels to open short positions. the price is currently trading near and below key short and long-term moving averages.Comment
The last setup for the downtrend: Finally the 200 days moving average is going to be crossed by the 100 days moving average. Once this is set up, more bearish action is expected.Disclaimer
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