SPX Pullback This Week Expected (600-1000ish pips)
Short Term: Bear
Long Term: Bull
Unknowns: Fundamentals (Stimulus talks/reaction to gold creating instability in the dollar, Crude Oil Inventory Wednesday, Unemployment claims Thursday)
For the past week and a half we've had a good bull run on the SPX. I myself made plenty of good trades and was able to hold the position and ride the wave. But I'm afraid it might temporarily be over. I've outlined the impulses/rallies in blue and the pullbacks in gold going back to June. After our last major resistance turned support (designated in the pink bordered box) that area was never retested once it left the building. After the big dip on the 11th creating and creating a new high on the twelfth, you can see the RSI and MACD see a shift in momentum. I drilled a little deeper into this segment here.
SPX did not create a new high and side stepped the channel we've been following for the last two weeks. Which means another channel will be forming and I have the idea in the original chart. I believe we'll be following that channel probably making a few big drops along the way to the 3290-3280 area. Which would currently give us roughly 880 pips. What will be interesting to see is how it reacts with the 3330-3334 level. It is possible for that level to maintain support as it moves sideways. But I believe that is highly unlikely. Instead I believe it will drop through that level and retest for the sell down to the 3280 area. The two scenarios are loosely depicted below.
What I'm personally hoping for is a quick/deep re-tracement bouncing off S/R levels along the way in which I will setup a sell down to the 3280 level for the major sell that would look something like this.
Lastly I had to take a fibonacci re-tracement into consideration. The 3280 level sits just above the 618 re-tracement as is with the current high and 3280 being "1" fibonacci level. It would not be surprising If we see bullish action and a new All Time High (ATH) created around 3205 come Sunday/Monday that would then push that 618 re-tracement level up to match the 3280 level. This would be the ultimate trade scenario and such a scenario would be as follows.
The one thing that could happen that I'm not considering is if we fall straight through that 3280 level. So I'm not going to worry about that.
Thank you for checking out my analysis! Let me know what you think, please and thank you.
Long Term: Bull
Unknowns: Fundamentals (Stimulus talks/reaction to gold creating instability in the dollar, Crude Oil Inventory Wednesday, Unemployment claims Thursday)
For the past week and a half we've had a good bull run on the SPX. I myself made plenty of good trades and was able to hold the position and ride the wave. But I'm afraid it might temporarily be over. I've outlined the impulses/rallies in blue and the pullbacks in gold going back to June. After our last major resistance turned support (designated in the pink bordered box) that area was never retested once it left the building. After the big dip on the 11th creating and creating a new high on the twelfth, you can see the RSI and MACD see a shift in momentum. I drilled a little deeper into this segment here.
SPX did not create a new high and side stepped the channel we've been following for the last two weeks. Which means another channel will be forming and I have the idea in the original chart. I believe we'll be following that channel probably making a few big drops along the way to the 3290-3280 area. Which would currently give us roughly 880 pips. What will be interesting to see is how it reacts with the 3330-3334 level. It is possible for that level to maintain support as it moves sideways. But I believe that is highly unlikely. Instead I believe it will drop through that level and retest for the sell down to the 3280 area. The two scenarios are loosely depicted below.
What I'm personally hoping for is a quick/deep re-tracement bouncing off S/R levels along the way in which I will setup a sell down to the 3280 level for the major sell that would look something like this.
Lastly I had to take a fibonacci re-tracement into consideration. The 3280 level sits just above the 618 re-tracement as is with the current high and 3280 being "1" fibonacci level. It would not be surprising If we see bullish action and a new All Time High (ATH) created around 3205 come Sunday/Monday that would then push that 618 re-tracement level up to match the 3280 level. This would be the ultimate trade scenario and such a scenario would be as follows.
The one thing that could happen that I'm not considering is if we fall straight through that 3280 level. So I'm not going to worry about that.
Thank you for checking out my analysis! Let me know what you think, please and thank you.
You're either trading with Smart Money Theory or your just burning your money money. Believe me, I've been there.
