Recommendation: BUY (WITH CAUTION)/SELL SHORT HIGHER UP
Current Trend: Short-term down. Med-term sideways. Long-term up.
Strategy: Buy at current levels/or sell short a reversal down from the 2480 level.
(Daily)
Chart Setup: The S&P had a good rally last night, following on from a bullish reversal candle on Tuesday. It’s closed above line 4 (of a channel with line 3) as well as above recent highs (line 5), to give a short-term breakout.
Strategy Details: Traders buy at current levels, but with caution. A reversal day/candle down from 2480 level will be a short signal. If we get that, then we’re likely to see a large decline.
Target: Look for a move to 2480/2485 (and potentially 2500 at a push). For a reversal down from there, look for a drop to line 2 initially (2411), and probably lower. There will be prior support at line 1 at 2426.
Stop-loss: For going long, it’s a breaking of its prior one-day low from the start.
- For a short signal if triggered, stop is a close above the high of the reversal day down, or a close above 2481 (whichever is higher). Then use a breaking of its prior two-day high from 2417.
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