Recommendation: PREPARE FOR SHORT SIGNAL
Current Trend: Up on all main timeframes, but overbought.
Strategy: Sell short a reversal day down from 2500, or reversal week down (more conservative).
(Daily)
Chart Setup: The S&P has reached its upside target for the aggressive buy signal given here last week. It is now at the level where we’re looking for a signal to sell short. However, I'm looking for a bit more upside, as drawn in, and then a large correction to start.
- Its short-term Stochastic is entering its overbought region, so a sell-off is likely soon.
Strategy Details: Sell short on a reversal day/candle down from 2500 level, or for more conservative traders, sell short a reversal week down.
Target: Up to 2500/2505. And then a correction to begin, to take it down to line 1 at least (2445), but more likely below there to line 2 (2413) or lower.
Stop-loss: A close above the high of the reversal day (or week) down, or a close above 2507 - whichever is higher. We’ll advise when to tighten the stop once the downtrend gets going.
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