SPX near triangle resistance, could still fall to 2400

Πανικός…όχι ο καλύτερος σύμβουλος
May 8, 2018
Το ρίσκο, τα κέρδη και οι ζημιές
May 9, 2018

SPX is trading below 2680-2700 triangle resistance. A rejection here will keep the triangle scenario valid, for a final downward move to 2620-2600 to complete wave E.

Price is testing both the upper triangle boundary and the Ichimoku cloud resistance. This is very important resistance. If we break above the cloud and above the upper black trend line, then most probably the triangle was an entire wave 4 formation and we have started a new upward wave to new highs targeting 3000 points in SPX. A rejection (my preferred scenario) will open the way for another move lower to complete wave E above 2590-2570 support. A break below 2580 will open the way for a push much lower towards 2400 where we find the 23.6% Fibonacci retracement of the wave (III) rise.

My long-term wave count as shown above implies that there are still chances for another strong leg lower to reach an important Fibo level for wave (IV) to be complete. But also I cannot ignore a break above 2680-2700….this would be very bullish….

What about now? My strategy is to be short as long as price is below 2700. Add on a break below 2580. If price falls and pauses at 2600 area I close shorts. Above 2700 I turn bullish.

 

Thank you for taking the time to catch up on my thinking.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.