SPX sell off next week
The chart is of the US 500 (S&P 500) on a 4-hour timeframe, displaying a recent upward trend followed by a strong bearish signal. The price has reached an overbought condition, indicated by the oscillator at the bottom of the chart, and this condition is confirmed by the "ND" (No Demand) and "UT" (UpThrust) signals from Volume Spread Analysis (VSA). The Fibonacci retracement levels are drawn from the recent high to low, highlighting potential pullback levels. The chart suggests that the price might soon pull back to these levels, specifically around the 50% and 61.8% retracement levels, which are significant areas of resistance. Traders should watch for additional bearish signals at these levels to confirm the continuation of the move down. Once confirmed, it is expected that the price will fail to maintain higher levels and will begin to decline, targeting lower Fibonacci extension levels such as 127.2% and 161.8%. This strategy involves waiting for the price to pull back to the identified Fibonacci levels and then entering a short position after bearish confirmation, with stop losses set above the recent high to protect against unexpected moves. The anticipated move down is depicted by the blue arrows, indicating a likely path for the price to follow as it declines.
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