US indices fell below short-term support levels last Friday confirming our bearish view. In previous posts you have read that the lower highs sequence and the impulsive declines, were signals given by the price movements implying further weakness should be expected. Also, in previous posts I mentioned several times that the market move that started after the market has topped in 1687 (S&P) was not over and another leg down was to be expected. My initial price target for this correction to end or pause was and still is the 1600-1620 area. On Friday the short-term trend remained down and confirmed its strengthening by breaking below recent lows (1635 S&P).
The entire move in S&P from 1687 has a few common characteristics. Down moves look . Up moves look corrective 3 wave patterns. A sequence of lower highs and lower lows has been confirmed. All these signals are signs of a downward trend. Taking into consideration that the market has risen for such a long time, a natural small degree correction would push prices towards 1600-1620 at least. Therefore we remain bearish and we will see how the market will react at that support level.
If prices manage to break below 1600 firmly, then it will not be a surprise to see the Index fall as low as 1550. We’ve been bearish from 1675 and our members in May had access to my trades in S&P together with all other products where I sought after profitable opportunities. Feel free to check my trades performance during MAY and don’t hesitate to contact me at email@example.com for any question you might have.
As always, thank you for taking the time to catch up on my thinking.