After hitting an all-time high on Feb 20, SPX started a downtrend that seemed at first to be a normal correction and took us to a bear market.
Wave 1
Initial drop from 3397.1 to 2853.3 (-16.01%)
Wave 2
Retracement to the 50% level of wave 1
Wave 3
A second big drop from 3130.2 to 2181.8 (-30.30%)
Wave 4
Retracement to the 50% level of wave 3
Wave 5
By tracing a fib extension on wave 3, the 1.272 level projects a drop to 1923.8 level which corresponds to the monthly support from June 2014 to March 2016.
Economic data from all around the world showing a huge increase in the unemployment rate. Oil price hovering around all-time lows. Governments and health organizations are struggling to control the spread of the virus.
In these uncertain times, with no end in sight for the COVID-19 pandemic, a wave 5 is most likely to happen.
Short trade idea: Entry below 2412, Stop Loss above 2656, Target at 1923 (1.272 level), risk: Reward ratio of 1:2
Wave 1
Initial drop from 3397.1 to 2853.3 (-16.01%)
Wave 2
Retracement to the 50% level of wave 1
Wave 3
A second big drop from 3130.2 to 2181.8 (-30.30%)
Wave 4
Retracement to the 50% level of wave 3
Wave 5
By tracing a fib extension on wave 3, the 1.272 level projects a drop to 1923.8 level which corresponds to the monthly support from June 2014 to March 2016.
Economic data from all around the world showing a huge increase in the unemployment rate. Oil price hovering around all-time lows. Governments and health organizations are struggling to control the spread of the virus.
In these uncertain times, with no end in sight for the COVID-19 pandemic, a wave 5 is most likely to happen.
Short trade idea: Entry below 2412, Stop Loss above 2656, Target at 1923 (1.272 level), risk: Reward ratio of 1:2
Trade closed: stop reached