SPX500 Possible Descending Top for Week of 8/17/14

FX:SPX500   S&P 500 Index
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I am forecasting a possible classic "Descending Top" lower peak formation for the week starting 8/17/14. This formation follows the classic structure as outlined in the "One Way Formula" by William Dunnigan. We are predicting a closing price reversal from up week (this past week) to down week next week. In other words we are predicting a "red" bearish engulfing line for the week of 8/17. Of course this may not happen but that is not the point. In order to be one step ahead of the market a trader must "forecast" what the next upcoming candle may possibly look like ahead of time. That way if the event does happen the trader is already in the trade while the trade is gathering momentum. Our entry point for the short is 1926. Stop loss is 1965 (above last weeks high) or 1993 (above the yearly high). Profit target is always greater than the risk and should be at least 1880 or lower.

Keep in mind that this setup may not develop. If it doesn't you simply remove your resting OCA (one cancels all) orders with your broker of choice and we go to the next setup at a later date. Do not "jump the gun" on these kind of trades because the market needs to prove itself first to you. This helps to lessen our risk over time and keeps us out of trades that have no momentum in our anticipated direction.

Entry for short is below last weeks low. Sell low and buy to cover your short lower. You can use a range of vehicles. E mini SP             500 futures , or SPY             ETF's are good choices. This is not a good setup for option traders as you are working momentum and premium will be very expensive. Good Luck to all and lets see what happens.
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