Let me first underline the most important thing (for myself too :-) ). We may think it is idiotic, but until price goes up, that is bullish. And as you see, SP500 had a nice bullish acceleration from Kijun and Kumo test ard 1865-1870.
The daily Ichimoku setup is still absolutely bullish: price above Kumo, T/K total bullish, all lines (including future Kumo SKA and SKB components) point up, Chikou Span is above price and is still in relatively open space ahead.
However I also see some signals, which suggest a correction is possible from these levels, thus call for profit taking on long positions at least.
Slow Stoch turning down and has some negative divergence compared to price. MACD also strange a bit, looks bullish but with less power in it. 4 Hrs Slow Stoch bit bearish, and also 4 Hrs Heiken Ashi may give a corrective signal too.
Since volatility is extremely low, I think the best and cheapest way to buy protection for longs is to add on a zero cost Put structure (Long Put vs covered Short Call). If you'd like to play the chance correction (seriously only with 0,5 trade unit), you can buy a simple Put @ 1910 strike. (e.g. 25 days maturity it is trading ard 7,50 points). I also think that VIX is generally too low at these levels, and together with CPCE it shows that bulls are extremely, maybe too much relaxed. No one wants a protection. It often happens that suddenly most of them will like to have it at once. I am not the biggest expert of VIX trading, but since front end of VIX curve (July/August spread) has flattened some in last days with August VIX being kind of stuck ard 13,85, I would rather buy that, than the July contract.
Important support levels/areas are: 1945-1949 / 1916 / 1896. If the correction happens, these can be your targets, and if you wanna re-enter longs, then the two lower levels I would suggest to look for entry signals.
The most important long term support is up to 1880 by now. Bearish reversal could take place only with clear break of that. Anyway I think it has less importance during low volume summer trading.
p.s.: is DAX printing a double top? Is it building a range top? hmmm, no one really understands why it got hit by 1 % today. I think it is mainly because of lack of liquidity. This also gives me a feeling that volatility in equities is defenately too low, compared to the possible short term swing that can happen in case of a relatively bigger profit taking on a less liquid market.
Comments
A-shot
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Thanx, i enjoy your coverages with ichimoku and different time frames.
Kumowizard
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Thx a lot for the feedback, and for following.
A-shot
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I have a selected few i reach all charts from :) u're one of them, the track record seems quite nice ;) Plus you learn here and there from everyone :)
Kumowizard
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Thank you again. Well, a good idea and the track record of ideas is one thing. However each and every trader has a different style, even if they follow a similar system or similar method. Thus most of the success is based on consistency, timing, position sizing and money management. Any time I blow some of my profits, that is always due to crossing a bit one of these basic rules :-).
A-shot
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Well, isnt this a major rule of trading? Never go against your own system/rules?:) I have to agree, each time i screw up, i see exactly why :)