Into a super interesting area in the SPX now. If we draw a fib from the high to low of the March 2020 crash it gives us a 220 projection around 4800 sort of area. In most market tops I've seen, the final swing has come in somewhere between the 161 and 220 fib of the last big swing down. Using this strategy generated some early signals at the 161 and once these were invalidated it was time to wait a little while (Hence our posting pause here) but while we're into the 220 area we have maximum risk:reward on this type of setup.
When we have these in place, I always look for known topping patterns in the area the fibs forecast resistance. The triple top can be a strong reversal pattern.
(Caution note: What we have can also evolve into some sort of harmonic pattern and this means even if the high is really close, there can be another parabolic move before that happens. In my opinion the RR on setups here justifies speculation on the triple top, adjusting to short a D leg if it forms and then overhauling the plan for a breakout trade if these reversal patterns fail).
When we have these in place, I always look for known topping patterns in the area the fibs forecast resistance. The triple top can be a strong reversal pattern.
(Caution note: What we have can also evolve into some sort of harmonic pattern and this means even if the high is really close, there can be another parabolic move before that happens. In my opinion the RR on setups here justifies speculation on the triple top, adjusting to short a D leg if it forms and then overhauling the plan for a breakout trade if these reversal patterns fail).
