It has not been a good year to go short on the S&P 500 (or really a good decade) but, and I say this with some hesitation, perhaps it is time.
Right now, I don't expect this to be anything but a pullback to the 50 day moving average (and thus breaking underneath the top of the long running megaphone pattern the fintwit bears post ad-nauseum). If the 50 day breaks it's a short trip to the 100 day and then the 200 day which also aligns closely with the ascending trend-line from August. A test of the 200 day seems overly aggressive at the moment so if one enters short I would take off some of the trade at the 50 day and set a stop loss just above the 10 day.
Right now, I don't expect this to be anything but a pullback to the 50 day moving average (and thus breaking underneath the top of the long running megaphone pattern the fintwit bears post ad-nauseum). If the 50 day breaks it's a short trip to the 100 day and then the 200 day which also aligns closely with the ascending trend-line from August. A test of the 200 day seems overly aggressive at the moment so if one enters short I would take off some of the trade at the 50 day and set a stop loss just above the 10 day.
Comment:
Stop is at 3160, still leaving this one open, for now.
Trade closed: stop reached:
SPX blasted through my stop. I still don't have any faith in this rally but melt-ups can be tricky.