S&P unlike DOW JONES, has made a downward move from the recent all time highs. Then it pulled back up in a corrective three wave pattern towards 61,8% Fibonacci retracement and now is heading again lower. Short term trend is down as expected by most of our previous posts. Internals show signs that wave 4 correction is not over. We believe that although corrective, the downward move is partially finished. Only wave A and B are most probably finished and we need to go towards 1670 to finish the downward move. however believe that the entire move from 1560 is over and we are at least heading lower towards 1600.
Our possible wave scenarios are shown in the chart above. We expect another leg down. Breaking below 1680 will confirm our view. Long positions are to be favored only if prices stay above 1680. Breaking below 1684 will be the first sign of weakness. Either as corrective wave C or impulsive wave 3, we expect a downward move. We will let the market prices unfold and give us more info on where we are heading next. Until then we favor short positions with 1698 stop.
As always, thank you for taking the time to read my new post.
A term used to describe a trader (bear) who is expects that a particular asset – be it a commodity, currency or product – to fall in value. The opposite of a ‘bull’.
The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.
Beliefs held by the aforementioned ‘bears’ of the trading world, are described as bearish. Characterised by a generally pessimistic outlook on the state of a given asset, a bearish outlook would suggest that a fall in value is imminent. Opposite of bullish.