themarketzone

Potential breakdown play towards Yellen testimony

FX:SPX500   S&P 500 index of US listed shares
SPX             was rejected from the potential Sell Zone that I mentioned in my previous analysis (near 2180)
Since then SPX's price closed below the fast and 50 MA lines and today's price action is actually very interesting as we see the bearish reaction to the Fast MA line again following today's green opening - Another bearish signal assuming that SPX             will remain below the MA line by the close.
The next critical element is the trend line that was formed since September 12.
A breakdown of this trend line can send SPX             all the way down to 2100 and 2080.

Comment: Support zone held and $SPX is again testing the resistance zone and the top of the small Flag pattern (red dashed line)
Comment: SPX closed outside of the Triangle pattern.
Potential short term bearish signal that can lead SPX towards 2120, 2100 and 2080 (final target zone). Read more in my latest newsletter (link in signature)
I'm a buyer if we drop like that.

I'm considering a risk reversal options trade, there's a nice skew (as pointed out by Tim West).

Cheers.
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