Five days passed since my last post, and SP500 reached new highs. As I often say, what seems to be stretched, can become even more lunatic overbought. That has been happening now, but the pullback is inevitable, and there are already some signs on the lower time frames it may be very close to happen.
Daily: The only way is still straight up. But the angle of this bullish trendline is almost 90 degrees, so I don't think it can go on like this. Slow Stoch has been overbought and price ran far away from Kijun Sen and Senkou lines. MACD slowly started to converge to its signal line too. This mkt really need some consolidation or correction before ... tbh I don't know what it will do next in short term. However for the long term I have this idea about building a huge bearish megaphone pattern. Within this possible pattern you can see the equilibrium Price range is 1929-1965. I think from teim to time this range will attract the Price again, but for now we can not really expect a heavy selloff, at least not based on Ichimoku signals, as Kijun Sen is very far away. The good daily sell signals always come when Tenkan and Kijun stay close together just below the preice and when these averages have good chance to cross bearish.
4 Hrs: Still trading bullish, with short term supports at 2020 (Kijun and Trendline) and 2000 (Kumo). The only worrying signal here is DMI-ADX, which looks like the Bullish momentum started to run out of power. Anyway, for a real counter trend short Price should first break the trendline at 2020 but rather break below the Kumo. For now my best guess is to see some sideaway consolidation bewteen 2000-2030.
1 Hr: price on this time frame already started to consolidate and price action has bearish bias. Maybe the first bearish entry point could be at/below 2020-2025.
As you see there are signals for a possible top here, but not yet good signals for a large position short entry. It is time to watch, but you must be very careful with outright shorts. For now what I recommend is buying Put options for Dec maturity at 1950 strike, or buying bearish Put Spreads 1965/1910. Holding outright shorts can still be annoying, as hard to place reasonable stops. Let's just wait for some more clear sell signals.