Two weeks ago, I made a bullish call on the S&P 500 and suggested that 2625 could be our upside target ( see it here ). Not much has changed.
I don't think I'm doing anything novel by illustrating above the somewhat unconventional head and shoulders that has played out on the S&P 500. A lot of people have spotted this and it has driven a lot of technicians to be bearish. I don't necessarily disagree, but I've heard a lot of bearish calls lately which leads me to believe that we will see one last blow-off rally before we see any downside. My best guess is that the government shutdown ends and the S&P rips higher only to be sold off after running into the 2620-2630 range.
There is, of course, a potential for us simply to collapse from these levels. The VIX has dropped into support, stochastics are very overbought, the trade war is unresolved, Powell waffles between hawkish and dovish and global growth concerns remain. And yet, a bullish trend is a bullish trend and we must respect it until it either tests resistance or fails on its own.
I think we can short the S&P 500 on a rally into the 2620-2630 range.
Target 1: 2550
Target 2: 2520
Stop: 2640
I don't think I'm doing anything novel by illustrating above the somewhat unconventional head and shoulders that has played out on the S&P 500. A lot of people have spotted this and it has driven a lot of technicians to be bearish. I don't necessarily disagree, but I've heard a lot of bearish calls lately which leads me to believe that we will see one last blow-off rally before we see any downside. My best guess is that the government shutdown ends and the S&P rips higher only to be sold off after running into the 2620-2630 range.
There is, of course, a potential for us simply to collapse from these levels. The VIX has dropped into support, stochastics are very overbought, the trade war is unresolved, Powell waffles between hawkish and dovish and global growth concerns remain. And yet, a bullish trend is a bullish trend and we must respect it until it either tests resistance or fails on its own.
I think we can short the S&P 500 on a rally into the 2620-2630 range.
Target 1: 2550
Target 2: 2520
Stop: 2640
Trade active:
Trade is active
Trade closed: stop reached:
Stopped out! The bulls have shown their might here.