Our website disappeared during the weekend after an attack on our servers by hackers. After a lot of hard work and persistence, we finally got things sorted out and we can now post a new update for our followers. Many times before I have put emphasis on the bearish scenario that 5 waves from 1343 are nearly or already over in S&P. This does not mean that we only look for short positions trades. As always, my analysis has one main rule. Respect the support and resistance levels. This past Friday that is exactly what I did and I informed our subscribers through the exclusive twitter account. I changed from short to long position and went net long at 1582 cash price.
Prices seemed to respect the short-term support I noted in my technical analysis. Additionally prices seemed supported by buyers and I took the opportunity. Our initial view was that a double top was most probably going to be formed. It did happen as prices did not move past the all time highs and slid downwards towards 1580. My first sign that the bearish scenario was not getting any stronger was the corrective decline. There was an absence of an downward pattern. My second sign was that prices had reached my support price level. If indeed the bearish scenario were to prevail, prices would fall sharply below the 38% retracement. Instead prices started to rise and that’s when I reversed my position from short to long.
Currently prices trade with more than 10 points profit for my position and with good chances to see prices above the 1600 level during this week. The technical formation prices currently take is a bullish cup with handle as depicted in the 60 minute chart below.
Initial support level is found at 1587. Below that, support is found at 1580. Trend remains up with potential to more upside. As always in our last few posts, very important intermediate support level is the 1540-35 area. For more help trading this index you can become a subscriber and seize the opportunity to add value to your trading.
As always, thank you for taking the time to catch up on my thinking.