Recommendation: SELL SHORT AFTER NEXT RALLY
Current Trend: Short-term sideways. Med-term sideways to up.
Strategy: Aggressive traders only, buy now. All others sell short a reversal down from 2480+ level.
(Daily)
Chart Setup: The S&P is closed above line 3 to trigger a buy signal discussed last week. It reached our 2480 profit target exactly, and then dropped sharply Tuesday night but closed off its low. I'm looking for one more small leg up and then a large correction to start (as drawn in).
- Its short-term Stochastic is overbought, so one more bounce will set it up nicely for a drop.
Strategy Details: Aggressive traders only, can buy at current levels, with caution for the one more rally. But all traders to sell short thereafter on a reversal day/candle down from the 2480-2490 level.
Target: A bounce back to 2480-2490 (at a push 2500). And then a drop to line 2 (2413) for shorts. There will be prior support at line 1 (2434) where one can lock in partial shorting profits.
Stop-loss: A prior one-day low for aggressive longs. When shorting higher up, stop will be a close above the high of the reversal day/candle down.
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