S&P 500 starting February 2016 at a potential temporary bottom

Updated

The market is still very choppy, but slowly the large downtrend of January is slowing down with China finding a bottom region as well as CrudeOil (see related charts). I see a last re-test of the bottom with the price going towards 1900. Then the way how the market reacts to this potential decline will decide the overall direction of the next months of the year (holding above the low of January 2016 and therefore above 1811 or falling below it).

My plan is to long more below 1900 for example at around 1881. Until then I'm hedged short from 1937 since last Friday.

My short entry: 1937
My stop loss: 1936
My target: 1881

Next trade idea:

Long entry: 1881
Stop loss: 1849
1. Target: 1969
2. Target: 2059

Note

My short from 1937 got stopped out yesterday at break even.

After oil fell more the entire Monday I had entered a new short before the Monday close at 1940. A little bit late given that it rallied up to 1946 on Monday. But I was busy doing other things, same as updating this. Currently S&P 500 is down to 1922 and had tested 1915 but bounced of earlier from the 1916 region.

In case the S&P 500 does drop lower as outlined on the chart above, then the support might be higher around 1888 when drawing the classic 0.618 Fibonacci retracement of the recent candle bodies. An area the price loved to move around the entire last week. So expect a double bottom with a higher low to form anywhere between 1860 and 1888 this week potentially on Friday. Followed by a strong rally towards 1970 starting next Monday or Tuesday (in the second week of February 2016).

Note

Groundhog Day: A time loop, repeating the same day again and again...

Exactly 14 trading days later, the S&P 500 wasted a whole lot of time, just to return back to the same situation as before. A neutral position there the market could either break-out higher or fall back towards the lows - again:

imgur.com/6mqfgi6

Note

I mean look at this screenshot of the chart imgur.com/6mqfgi6 now 14 days later.

ChartArt

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