In my previous post on SPX (link attached below the description), I explained how we are going to see a rejection on this uptrend soon and we beginning to see that now.
In this post I will explain how I am playing this short setup.
In the previous post I had a pitchfork. I simplified it with three parallel channels, one larger and two inside it in its upper and lower half so we now have four rising trendlines which will be our point of interest when Price Gets there.
In the image below I have highlighted the properties of these trend lines based on past price action within the channel, which you can observe yourself.
I have indicated three take profit levels on the main chart. I don't think TP1 would be necessary as I don't expect the trendline to hold based on its past behavior.
TP2 and TP3 are my main targets, which is where I will look for signs of a nice bounce back up.
If you observe the channel, we have never really resumed a trend back up without creating a double bottom on the one of the lower two trendline in the chart as highlighted in the image below, if that happens, we resume the uptrend to new highs. That's when you take a swing long position on SPX.
On the other side if TP3 doesn't hold we are looking at a potential change of trend a macro scale, but I won't give up on the upside just after the break as we could possibly see deviation and bounce back in the channel after testing the support area as highlighted in the main chart.
What happens if we lose 4300 level, we go way down, I will leave that detailed analysis for another post.
In this post I will explain how I am playing this short setup.
In the previous post I had a pitchfork. I simplified it with three parallel channels, one larger and two inside it in its upper and lower half so we now have four rising trendlines which will be our point of interest when Price Gets there.
In the image below I have highlighted the properties of these trend lines based on past price action within the channel, which you can observe yourself.
I have indicated three take profit levels on the main chart. I don't think TP1 would be necessary as I don't expect the trendline to hold based on its past behavior.
TP2 and TP3 are my main targets, which is where I will look for signs of a nice bounce back up.
If you observe the channel, we have never really resumed a trend back up without creating a double bottom on the one of the lower two trendline in the chart as highlighted in the image below, if that happens, we resume the uptrend to new highs. That's when you take a swing long position on SPX.
On the other side if TP3 doesn't hold we are looking at a potential change of trend a macro scale, but I won't give up on the upside just after the break as we could possibly see deviation and bounce back in the channel after testing the support area as highlighted in the main chart.
What happens if we lose 4300 level, we go way down, I will leave that detailed analysis for another post.
