FullTimeTrader
Short

SPX500-typical diamond-long term decline expected

FX:SPX500   S&P 500 index of US listed shares
2177 12 43
Im very excited because i think we have a very nice short opportunity on SPX             that could last months.
I feel "confident" because this price behaviour is common after a diamond pattern.
I know this pattern very well, i have traded succesfully it before:
CHFJPY-nice diamond and other reasons to long

NZDCAD-expecting major reversal-diamond pattern on H4


A diamond pattern 80% of times means trend-change. After it price usually makes deep retracements (0.7860 or 0.8860) but most important will not MAKE NEW HIGHS.

According to EW price usually forms a series of 1-2s or leading diagonal , this means a strong third wave is expected.

I will try to enter enter short near the 0.7860 and 0.8860 fib retracement.

We can use this setup also.

- corrective channel
- AB=CD pattern
- trendline resistance
- 1.27 fib extension

Entry price around 2050.

Best regards.


what do you think now that it broke out of the channel?
+1 Reply
I use elliot waves as confirmation, right now staying aside
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josepaiva PRO FullTimeTrader
Are you still bearish? For God sake we all should... but all these news about job reports and all this manipulation makes me wonder for how long more they will keep this bubble inflated...
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It's inching higher but the resistance is unreal.
Now jobs numbers are revised...really funny.
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Can we perfer this trade????
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FullTimeTrader pathaniasourabh
Hello, i would better wail till next week, bulls feel still stronger this days. regards.
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Beautifull diamond top!
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thank you for the great analysis
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Hi, thanks for sharing. I'm a newbie. Would you mind telling me what's the 0.7860 and 0.8860 fib retracement levels? Both close to 2050? I agree with your analysis. VIX is now almost back to the breakout level, after a golden cross similar to 2007; it's near the bottom, and SPX near the top. VIX has formed a big IHS, much larger than the 2007 one. Good luck!
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Great trade setup helped me see this one. thanks
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