Possible Levels in case we observe a normal correction. S&P500
As you already know, EVERYTHING will tend to correct after a certain period of rising periods. This doesn't mean at all unnormal or apocalyptical forecasts.
So, if the index corrects, what can we expect?
Currently, the price is on the edge of the ascending trendline holding the ascending movement since March 2020. From here, we have two support levels that we think the price may reach If we observe a correction. First level 4000.0 - Second Level 3750.0. On each of them, we have shown the % decline, and we also have drawn a circle on the last correction to get an idea of the shapes we may observe and the durations.
Ok, and what if the correction doesn't happen? What can we expect?
In that case, we think it would be appropriate to see a breakout of the current channel (yellow lines), and if that happens then, the secondary yellow trendline has been working pretty well as a dynamic resistance zone. the target for that movement is 4700.0
How can I use this analysis?
That depends on your trading style. The main objective of our analysis is to define clear zones that we consider are paths of low resistance. So, the areas from level to level are appropriate for people trying to catch small trends. The levels themselves are good situations for reversal traders. Again, everything depends on your style.
What is our trading plan?
At the moment, we are not developing setups on the index; we must watch clear corrections before developing new trading opportunities (that's our trading strategy. Trade after corrections) So, the optimal scenario for us to trade would be observing the -9 or -14% correction. Paying attention to the shape of the structure and trade the breakout.
Thanks for reading! We hope this can bring better insight into your decision-making.
So, if the index corrects, what can we expect?
Currently, the price is on the edge of the ascending trendline holding the ascending movement since March 2020. From here, we have two support levels that we think the price may reach If we observe a correction. First level 4000.0 - Second Level 3750.0. On each of them, we have shown the % decline, and we also have drawn a circle on the last correction to get an idea of the shapes we may observe and the durations.
Ok, and what if the correction doesn't happen? What can we expect?
In that case, we think it would be appropriate to see a breakout of the current channel (yellow lines), and if that happens then, the secondary yellow trendline has been working pretty well as a dynamic resistance zone. the target for that movement is 4700.0
How can I use this analysis?
That depends on your trading style. The main objective of our analysis is to define clear zones that we consider are paths of low resistance. So, the areas from level to level are appropriate for people trying to catch small trends. The levels themselves are good situations for reversal traders. Again, everything depends on your style.
What is our trading plan?
At the moment, we are not developing setups on the index; we must watch clear corrections before developing new trading opportunities (that's our trading strategy. Trade after corrections) So, the optimal scenario for us to trade would be observing the -9 or -14% correction. Paying attention to the shape of the structure and trade the breakout.
Thanks for reading! We hope this can bring better insight into your decision-making.