SPXUSD Battle Plan

2020년 2월 28일

Background
A while back I made my offical call that I thought SPY was topping on a weekly level at 315. We had a nice reversal candle in a rising wedge, with lots of divergence so I made my call. And of course, the wedge broke to the uspide rather than returning to support and basiccally when previous resistance was tested as support I was out of my position and waiting to re-enter from higher up with better timing. I don't generally advise doing what I did, but I market bought into SPXU when I saw that the top of the wedge was reasserting itself as resistance.

I am going to link my offical post, as well as my Eurodollar post as to why I plan on holding my SPXU short for a long time. I am working on capturing monthly long swings.

Analysis
The price action is clearly below the 50W SMA (purple) and has found support on the 400D EMA (red). A casual look back at the red arrows shows lots of support has been found on the 400 EMA and under normal circumstances I would agree that is a great place to Dollar Cost Average if you are a technical trader. Also according to this chart a great place to but the dip is the 200W SMA in blue

If you have the emotional energy trading a continuation pattern at the 400D EMA makes a lot of sense. A flag or a rising wedge means the price goes up from the 400EMA. The chart below shows the bollinger bands and some bullish divergences on basic indicators. It seems we are due a bounce. Looking back at the main chart I expect the black trend line will act as resistance even though we may get some height to the continuation pattern. Right now I am not about that life.

What I am hoping to see in the long run is a return to the EMA ribbon baseling (55 EMA) on the monthly chart and after a bounce/consolidation, a break through and the downtrend to end, on a monthly basis, when we see some bullish divergence on the MACD or MACD histogram, simular to what we see in blue. Either clear divergence or a technical bottom in the indicators suggesting a uptrend is due. The black lines show monthly bearish divergences which is why we are dying so badly


Obviously divergence at the limits of a bollinger band are important. And if price action drops out the monthly Bollinger band you better believe I am tailing my stops losses down very tight.

But for now? Any thrashing around we do in the short term is fine. I think I have a great entry. And if you review my linked post, another sign to close the shorts would be the eurodollar no longer pumping.

I have posted the yearly chart before as well. A return to the BB baseline makes a lot of sense right now. Even lower is also on the table. Either way, i am short, in the money, and staying short. Not financial advise of course just what I am doing and planning. I was wrong with the SPY call at 315, I could be wrong now, whether it be the 400D EMA maintaining support, the bollinger band bounce on the daily timeframe, my long term analysis, or anything in between.