Looking at SPX500 we see that price is in a corrective structure after a mini crush which took place in last August. In this corrective structure i have indetified two harmonic patterns that are not completed yet. Although i am very disciplinedwhen trading patterns and i always wait price to reach my pending order, in this situation i have so many reasons to enter the market with these patterns still incompleted.
As we can see in the chart D points of a gartley and an ab=cd harmonic patterns are just above a key support level which price wasn't able to break and complete the patterns. A long term resistance trendline, a bearish divergence with RSI, a median line of a channel (corrective structure), a five wave impulsive move in C wave, all meet in the same level making that level so powerful for price to break it.
Meanwhile we can see that price started falling breaking the support trendline (cd leg of ab=cd pattern) of C wave. Our harmonics have not completed yet, but i will enter this market now with two positions. Stoploss and profit targets as shown at the chart. If price reaches the first target i will palce stoploss to breakeven at the second one.
P.S.: Following your trading plan is crucial when trading the markets. Some times though it's ok when you adgust to the conditions of the market. These patterns are not completed yet but are showing the potential of a short setup.
Likes and comments are welcomed, John.
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In the second paragraph i say "key support level" but i meant a key resistance one.
Actually i chose this x as the begging of an impulsive move. Previous structure was more a corrective one. Thank you for your comment mate.. I hope you are doing fine!
tntsunrise
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I see. Agree that is the origin of the impulsive wave. Great Job!