Yesterday we posted an article regarding the potential that the entire upward move in SPY is over. Several times before we have mentioned how cautious bulls should be as we are very near to see the end of the upward move in S&P from 1343. Prices were rising in an overlapping pattern from recent lows at 1538 and as prices were rising so did we push our trailing stops higher. Our initial worries came with the sharp decline in GOLD and SILVER. Our members were informed with live tweets when we sold SPX early yesterday when the spot price was at 1570. Our initial target was the 1561 support, but as per our newsletter, breaking below 1559 prices would fall even further.
Below you can see just a small sample of our exclusive for members tweets. We were long in SPX from 1543 and closed all at 1568 together with additional lots bought at 1551. Then I sold yesterday at 1570 cash with first target 1562.
Our newsletter included in the daily setups our short view that if 1559 was broken, prices were to fall even further.
What about now? Prices have most probably made 5 waves down as shown in the chart below and are going to back test the broken channel.
If prices push higher than 1570-74 level, then this bearish scenario won’t be validated. This downward move we believe is not over. Confirmation of a top in S&P will come if 1538 is also broken. Then the road will open for a big correction towards 1485-95 area.
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As always, thank you for taking the time to read my new post.