In this first post on the SP500 we will do a breakdown of the situation and our current views on this index.
We are in a downtrend from Jan 4 's top of 4821. During this downtrend, we can see price created an head and shoulders pattern to the downside, and then get rejected twice into the big volume cluster.
According to our main scenario, this cycle corrective move is still about to complete and we need to finish primary wave (C)
In both cases, the count will agree with the price action: either it is a B of an ABC to the upside or a wave 3 of (C), the price got rejected at the volume cluster after creating a bearish wolfe wave pattern, and then gave us an impulse to the downside with a corrective move up to the 50% retracement: we therefore believe that the price will complete this pattern with another impulsive move to the downside.
We are therefore short on the index, targeting the wolfe wave target around 3600, that will be consistent with both the counts cited.
Our stop loss is our entry price 3940.3. We want to play it safe, since Powell is about to speak and big volatility is expected.
We will update on this trade and our next analysis! W
GMR
Comment:
Small tf count + order blocks
