S&P has made a considerable downward correction from the 1775 price level where it topped after the ECB rate cut decision. Prices were not supported and as we noted in previous posts had more to lose than above 1770. The decline almost reached our first target price of 1740. The correction has just started and we could expect more downside pressures to push the index towards 1730-20.
The 38% Fibonacci retracement is at 1725 and this is a very probable target to be achieved. If the decline comes in one go from 1750 to 1725, then we will have to be very careful with the wave structure and the form the decline takes. An decline from recent highs may have severe implications that could target price levels in the vicinity of 1500 as a big downward correction could happen if long term support levels fail.
The short term trigger EMA has been crossed giving a short term sell signal. Watch out what happened all the previous times the first EMA was crossed by price. The next support is the 38% retracement that coincides with our second trigger. The last line of defense for Bulls is the yellow dotted trend line and the price level of 1660-1646(low). For more help trading this index and more detailed analysis, become a subscriber today.
As always, thank you for taking the time to catch up on my thinking.
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.
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.