SP500 - Why I see a bounce longA LONG SCENARIO
We see the RED numbers. They show the Pendulum Swings.
Then we see the BLUE numbers, showing the minor Pivot Swings.
For both I apply the 0 - 5 rule. This means, if 5 is reached, a turn is highly potential.
The problem here is, that you don't know then the 5 is over.
From the RED perspective, the market has not jet reached it's low.
But from The BLUE swings, we can fairly expect a bounce, because we are at major support.
I expect support from the A/R lines and the red Centerline where price currently fluctuates around.
The green sliding-parallel is just a measure of overshoot in the angle of the A/R's.
So, if price can fight it's way back above the red Centerline by a open and close, then this could be a good long signal.
You may ask, why it didn't worked the last time?
If you are familiar with the Medianline rules, then you know, that after a breakthrough, we can expect a bounce back to it.
And that's exactly what happened. A bounce back to the Centerline.
A SHORT SCENARIO
Counter to the long idea stands the short idea, which could play out when we close below the red Centerline again. That would be very ugly and we had to expect price landing down at the red L-MLH or at least at the white Centerline (see the left weekly chart).
However we play this, we have to play it with maximum controlled risk and follow our trade plan.
Otherwise the market will rip off our face.
Trade save
