10 Reasons to be short the S&P 500 (and the Dow and Nasdaq):
1. Close below 34 EMA 2. Completed Head & Shoulders pattern 3. Close below the December high 4. "Falling off the roof pattern" - The market is said to climb up the ladder, the ladder is then removed and the market falls down much more quickly then it went up. The advance took about 4 1/2 months. The decline should take about 1-2 months 5. RSI divergence (on the weekly chart) 6. Small specs have the largest net long position since last September and the commercials have the largest net short position (data taken from Finviz.com) 7. Majority of traders bullish (subjective opinion from reading various blogs and posts) 8. Market declines on good news (strong jobs report on Friday and the market declines sharply) 9. Dow theory sell signal (transports didn't make new highs) and other sectors look like they have topping chart patterns also 10. Tomorrow is Monday
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I have heard that "the market takes stairs up, but elevator down".
I am too convinced that the bullish trend is broken and we may see a correction now. Your analysis is also convincing.
HighProTrading
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Yeah, you can also say that the bulls take the stairs but the bears throw themselves out the window. Thanks but don't forget no matter how convincing an analysis is, always execute your trading plan and respect your stops.
jimmy_hongkong
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Hi HighProTrading, may I know what makes you think that the index can fall to 1900/1820 level? Why don't you think it will stop at 2020 level, i.e. the bottom of the uptrend lines (diagram above posted by jangseohee). Thank you.
HighProTrading
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I was thinking about covering some of my positions or hedging at the 2040 level but I didn't mainly because I am trying to be a swing/position trader. If the market went down instead of up then I would have had to reenter my short positions and follow the market closely. I have a full-time job and I don't have time to follow all the meanders of the market so I decided to hold.
jangseohee
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it will take quite sometime for the Megaphone to take effect IF it is really the megaphone xP
I am too convinced that the bullish trend is broken and we may see a correction now. Your analysis is also convincing.