The next 3-4 weeks are going to change the long-term trend direction of the "S&P 500". The equity index is now at the edge of the edge of staying within the uptrend or starting a bear market.
On Monday, April 2, 2018 most of the European stock markets were closed and bears used this situation to drag the "S&P 500" strongly lower that day. On Tuesday, April 3 the German "DAX" index reopened after Easter Holiday and continued the uptrend it started the previous week. This helps US stocks to rebound from Monday''s lows.
The TRIX indicator shows a bullish momentum divergence, which means the bulls have could have a small edge, if this week closes strongly up. Otherwise the "S&P 500" is going to start a downward spiral of new lows in the next months.
Bullish near-term odds allow the following setup:
Long entry: 2575 Target: 2740 Stop loss: 2542
Risk/Reward: 5
Trade active
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The S&P 500 spot intra-day bounced from 2575.49 after dropping from 2592.17 since the Tuesday cash market open. I went manually long at 2580 after seeing this low at 2575.49 hold for several minutes.
Target: 2740 or higher Stop loss: 2542 Risk/Reward: almost 5
P.S. Today is the IPO of Spotify.
Comment
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The S&P 500 went from 2580 up to 2672 on April 5 and with a lower high up to 2656.87 on April 10 without hitting my stop loss in between, but now the market seems to start another leg lower.
I'm going to close the long most likely on Thursday and then switch to the short side.
Comment
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Futures indicate a higher open for the S&P 500. It might be a bull trap, but I give the bulls the benefit of the doubt for now.