Short

S&P Wedge Breakdown

By Remind

Updated

Opportunity to short with good risk reward ratio.

Play safe.

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Trade is Active.
There will be large resistance at the upper edge of the wedge.

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Trade is still valid

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New Highs as shown, but it's not backed by Volume. This is a good sign for the trade.

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We have more pressure to the upside.

S&P Printed a classic Flag in the 1-h timeframe.
We may be looking into hitting the upper wedge one more time before going down.

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Here we are testing the upper bound of the structure as mentioned in the previous update. If the price breaks above the upper bound and closes. The trade is invalid and I will close my position.

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Rejected at the upper wedge structure as we are looking for.
Price is testing the support.

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Everything is going as planned.
There is a bounce up to test the area of congestion (resistance).
I am looking to see a rejection at this area.

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Battle at the resistance as previously shown

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Looking for it to drop around this area to complete the corrective ABC wave

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Here we go

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Plenty of buyers at this area, expect price to stall or bounce up

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There's the bounce. we are in the range currently

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Look at that strong selling pressure. we broke out of the range easily.
This is triggered by the 10 year treasury rate increasing. But it really does not matter why it's happening and nobody truly knows.

Charts speak for themselves

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That was a good meltdown today, great bull-trap during that run up to 3900s.

Here is what I am looking for next. We are not out of the woods because there is a strong trendline support nearby. I am expecting the price to bounce of this trendline, however if we break it and consolidate below the trendline we are off to the races.

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There is the bounce off the long term trend line

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Let's have a closer look at what happened today.

There was a bounce right off the trend line as we expected and this happened multiple times looking at the hourly chart below.

You see all the bulls buying at this point because they think the trend will continue. Furthermore, they know that if the trend line breaks, the bulls will win and many will be looking to close their Long positions, therefore creating more downward pressure.

This is a very important line of defense for the bulls. Will they defend it or will the bears win this time around.

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This is a much stronger pullback that I was looking for.

I'm looking for a rejection at the levels below.

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Here is what I'm looking to see

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It looks like the failed flag scenario is what came to be.
The price fell below the flag structure and tested again but rejected as we are wanting to see.

Look to see the price test the bottom of the long term trend line. There will be buyers waiting, let's see if the bulls can defend or this time the bears will break through.

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Bulls are trying to defend their last line of defence

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We have a clear breakdown of the trend line like we have been waiting for.

Good job for all those who stuck with the trade.

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The price has gone inside the wedge again - this is not a good sign. We need to see price breakdown back outside the wedge.

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The price went back in the wedge and we have a new pattern.

This looks like an expanding diagonal.

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Here are the possible scenarios with the current structures we have.

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Trade closed - stop is reached. We are going to 4200s

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