Technician
Short

SP500: Time to Short Stocks!

INDEX:SPX   S&P 500 Index
3623 34 39
Update: Targets Hit
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I discussed in earlier posts why i am bearish on equities , hinting the federal reserve easy liquidity withdrawal and many technical conditions. If we just ignore all the warning signals on momentum indicators and the major bearish divergence on breadth indicators. One more major warning signal that cant be ignored IMHO is the breakdown of high yield junk bonds, which have been always a reliable indicator for stock market direction.

JNK             has broken below its long term trend line from 2011, in addition to successfully recording a new lower low. Add to that the major bearish divergence on Breadth, stocks above 200-days SMA .

I am shorting this market, looking for a meaty correction.

Best of Luck , join me at https://twitter.com/thefxchannel
Also at my Facebook             page www.thefxchannel.com
My best regards,
Technician

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Trading Criteria:
1. Trades are taken in two units
2. First unit would be closed at first target
3. Stop loss is then moved to break-even
4. Second unit would be closed at second target
5. Note that If 90 percent of first target is reached without triggering entry, trade is cancelled
6. Remember: Losing is a main part of the game
If you dont want to miss any trade and see all the trades live, fully transparent. No bullshit like some others. Join my FREE channel here https://telegram.me/technician_forex_trades
Sorry for the title, should be : Time to Short Stocks!.**
Reply
hccgtim PRO
2 years ago
Very good insights I have been short for a bit.
Reply
Technician TOP hccgtim
2 years ago
Good luck
Reply
VelsonChew
2 years ago
Thanks for this post.
+1 Reply
ZaloRostam
2 years ago
Could this analysis extended to SPY? I mean can I go short on SPY too? if so, would the targets be around same level as the SPX? Thanks for sharing
Reply
Technician TOP ZaloRostam
2 years ago
SPY and SPX are basically the same. The SPY ETF tracks the performance of the S&P 500 index as closely as possible, and thus move in tandem with the SPX.
Reply
andrius.lietuvis
2 years ago
Why short? Better buy this SPXS. Or indeed the best is to buy this: EDZ. Because if US equities go down and dollar go up emerging markets equities will go down even more. Am I right?
Reply
Technician TOP andrius.lietuvis
2 years ago
Emerging markets already under-performed for the past years. If stocks move lower, it will probably be global sell-off.
Reply
LastBattle
2 years ago
Panic sell, panic sell!
Reply
Timing is key
2 years ago
Nice use of JNK & 200 SMA as leading indicators on this, The SPX has already hit a critical selling area on my charts. The Dow is slightly lagging in price but timing will be the same. My figures have a minimum drop of approx. 21% which will be savage, The 55 RSI divergence on the Dow peaked as far back as May 2013 and has already left the station:) Thanks Technician for the post.
Reply
gunne821
2 years ago
The correction is long overdue. Seems like we're going to 1900.
http://www.marketwatch.com/story/what-to-read-into-the-junk-bond-divergence-2014-10-01?siteid=yhoof2
Reply
justindanethan
2 years ago
Hi, do you still think prices will ever go back to 1990 before going down or would you advise to go short now? I'm seeing the SP500 going down at the moment...
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Update: Hit First Target
Reply
HamedAghajani PRO Technician
2 years ago
did you get chance to hop on this trade?
Reply
Technician TOP HamedAghajani
2 years ago
Not this one.. I already had other positions open.
+1 Reply
prof_snape
2 years ago
Good call! Based on technicals, do you think the s&p could break its ~1800 support line? Im gonna be watching the jnk charts from now on... cool correlation i didn't know about until this post!
Reply
Technician TOP prof_snape
2 years ago
Yes i think sp will break lower, even if we see an upside bounce. Keep posted, will be posting another important study soon.
Reply
prof_snape Technician
2 years ago
Ok, will be watching. Thanks,
Reply
Smarttrade1st Technician
2 years ago
thank you!
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Technician TOP Smarttrade1st
2 years ago
Ur welcome mate..
Reply
timwest PRO
2 years ago
Well done!
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Technician TOP timwest
2 years ago
Thank you mate
Reply
jeremyb
2 years ago
Hi technician ! what is S5TH INDEX? rsi??
Reply
Technician TOP jeremyb
2 years ago
It's an index that shows the sp500 stocks above their 200 days simple moving average. If the number of stocks above the 200 SMA increases the index rises, if number of stocks above 200 sma decreases the index falls.
Reply
gunne821 Technician
2 years ago
Hi technician, great call, but do you see a second leg down still coming now? Markets behave like these last couple of weeks didn't happen.
Reply
Technician TOP gunne821
2 years ago
Well, we will probably rally further, maybe test area near 2000 again.
Reply
gunne821 Technician
2 years ago
Thanks, keep up the good work.
+1 Reply
shibbitz Technician
2 years ago
I know you are already short, would be great if you could do another updated chart on your targets and time frame, your last one hit it on the head. would be interesting to see, and much appreciated
Reply
Technician TOP shibbitz
2 years ago
I will try to do so as i see another short signal. Thank you
Reply
shibbitz Technician
2 years ago
great, cant wait to see it
Reply
Cfsqbwn. Technician
2 years ago
Great!!
Reply
prof_snape
2 years ago
Hey technician! Was wondering if your still gonna be shorting this market? How do the technicals look to you?
Reply
Technician TOP prof_snape
2 years ago
No no no.. :) I am neutral now. There is no short trigger signal for me. If i see one i would surely share it :)
+1 Reply
prof_snape Technician
2 years ago
Ok :) Thanks mate
Reply
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