XYZ-Trader-

S&P: Why your shorts aren't winning

OANDA:SPX500USD   S&P 500 Index
Have you been shorting this bull market wondering why you're not winning?

I've been getting direct messages asking me when is it a good time to short or why when there is a reversal candle there is no follow through to the downside.

Zooming out to the 2 day chart I think you can see why. We are in a massive uptrend channel since early last year right after the big COVID drop.

THE TREND IS YOUR FRIEND

As of today, I would not be trying to short or even go long. I think the market is too risky and is coming up to heavy resistance.

We need a big pullback before I think the S&P becomes attractive. Where is that pullback? I may end up waiting to see it pullback closer to the bottom of the channel (with retest) to go long. I'll also take a breakout of the top of the channel (with retest).

Why not short when it reaches to the top of the channel? We are in a strong uptrend and going short is not recommended. Some may take the short at the top of the channel and be rewarded. It's just not my type of trade. I like trades with higher probability.

Hopefully this view makes it much more clear why if you've been shorting the market since March 2020, you have been on the wrong side of the trade.

I will be a seller if the bottom of the channel breaks to the downside (with retest). Then I think shorting will become attractive.

Good luck trading.

"When it feels really right it's probably wrong and when it feels really wrong it's probably right."
Comment: I usually post a new chart every week but there hasn't much that has changed on this 2 day chart. It continues to track well and price continues to be in a bullish uptrend. I would not be selling into this market still.

It's hard to kill a bull.
Comment: I still continue to use this chart. Even with the big sell off we had the last week of January, the trend continues to remain your friend until she leaves you.

I did take a long trade on Tuesday at ES 3780 once it was apparent the week before was a bear trap.

Good luck and stop shorting until there is a clear sign of a reversal. We might be getting closer to a top but it hasn't shown it's head yet.

Comments

Would you update this chart and trend channel please? I can no longer update the data to show where we are at... Not sure if I should be bullish or bearish here
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Beautiful chart as always! I saw hanging man candles all around on Friday outside the Bollinger. I shorted the Friday close...381 SPY nailed off the Elliot Wave/Fib target. Expecting to find support at the 20EMA weekly, which is around the level of November 9 low, Pfizer day. Expecting a bigger rally there to 4200, at which point we should get a *sizeable* correction in late Feb/March. That dip will be the one to go mega long, expecting it to coincide with a Biden stimulus package and new Bull run.
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good explanation
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great expirations
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@XYZ-Trader- your content is really informative
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