For some time now we ‘ve been commenting through our posts here at TRADING2DAY that had more to lose than bears at the all time highs, where optimism was at its highest. We supported that traders should take short positions targeting at least 15100 in DOW and 1650 in S&P. The market not only reached our targets but also confirmed our fears expressed to our subscribers on July 12th. On July 12th we had sent a bonus update to our subscribers where we noted that although the market could make one last new high, bulls should be very cautious and raise their stops as the market was near the end of the upward move from June lows and a sharp correction was anticipated.
Our analysis anticipates this bearish bias to continue and downtrend to remain in force. We fear that the longer term trend may be in danger, but until we get a confirmation on this, we should start taking short positions once the upward correction ends. Prices are going to make an upward correction where most traders will believe that the uptrend has resumed and new all time highs should be expected. Our view is not to get carried away as the longer term wave relationships and wave patterns, show signs of an ending to the upward phase we ‘ve been in for at least a year.
Prices could go lower from this point but bulls I believe will have one last chance to exit when the counter trend pulls back towards the all time highs. I don’t feel very confident that this is just another shallow pull back that should be bought like all the other ones before it. I have a bad feeling that will materialise if S&P breaks below 1560. The first worrying signs will come if support at 1600 in SPX fails.
Concluding, we are bearish biased and now taking some profits at these levels and waiting for a bit lower to close all short positions. We expect a pull back to re-enter short as we believe this time the top is in and the market is getting ready for a deep correction. More updates and analysis will be available to subscribers as prices make impulsive and corrective wave that will influence our view. As always, thank you for taking the time to read my new post.
A term used to describe a trader who is expects that a particular asset – be it a commodity, currency or product – to rise in value. The opposite of a ‘bear’.
The idea is that bulls attack by bending their heads and poking their opponents upwards with their horns, symbolising the fact that they are buyers, driving prices up.
Beliefs held by the aforementioned ‘bulls’ of the trading world, are described as bullish. Characterised by a generally optimistic outlook on the state of a given asset, a bullish outlook would suggest that a rise in value is imminent. Opposite of bearish.