SPX IDEA - Short to Long before the BIG SHORT

When trading the US market - we need to consider several factors, past performance, key events, more recently Covid and the change of the US President. All of which have a significant influence on the market and the world.

Professional investors are looking closely for signs of a bubble.

If you look at the timings and go back to our post a few weeks ago - long SPx (below) at the reversal level. You can see we are now in the zone mentioned.

Whilst looking at DXY - what looks like a likely scenario is a rise of DXY dropping SPx, then a rise drop of DXY pushing SPx back up to create a new high (likely) before giving a full drop causing the bubble to break. Now at the same time - think logic, Biden moves into office, the drop is fear & uncertainty. within weeks it's pushing all time highs and the world is excited. Which is the best time for the sharks to attack. When the world is high fiving and thinking the Bull run will go on forever.

Worth thinking about and if you look at Elliott waves, Fibonacci extensions, Order Blocks. You will notice a drop, a rise, and then a bigger drop makes sense for more than one reason.

We will see.


Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.