The big drop in the S&P 500 dropped through support offering a good plan for both long and short positioning over the next trading week.
Short Scenario: - Wait for a bounce to test the trendline. Most likely headlines will subside on the viral outbreak and the market will bounce accordingly. - Enter short position when price drops below the near term low (wait for two full candles below the near-term low on 4 hr chart) - Target the longer term support line to close position and evaluate the next trade setup - Impeachment trial and Q4 earnings could be catalysts to take the market lower - Stop loss at the trendline or the peak of the bounce.
Long Scenario: - If the bounce takes price back above the support line, potential to go long with the expectation of a test of the most recent highs ~3,330's. - Wait for two full white candles to close above the trendline on the 4 hr chart before entering a long trade. - Stop loss at the trendline or at the near term bottom just below the trendline.