Long

SPX Great Opportunities On Both Sides

Updated

While this may seem obvious, it seems like my obvious ideas work more often then the less obvious, so i'm going with it. The 200SMA has been hit for the THIRD time today and immediately bounced off, for the third time once again. Currently I am accumulating my position between 2590-2610 and going long. My stoploss is under the 200SMA, at which point I will switch my trade and go 100% short. Both of these trades have around a 4/1 Reward/Risk ratio for short term trades. Looking into the intermediate term, the SPX is in a bullish falling wedge, and if the price can maintain above the 200SMA, the breakout of this wedge is inevitable. If this happens, I may take a midterm trade all the way up to the falling wedge break goal at the resistance line. It is also possible to take the short trade, wait for a pullback, and then take the midterm trade, as long as we stay over the 200SMA.

Adding to the probability of bullishness is that there is MACD Divergence on the 1Hour and RSI Divergence on the 1 hour as well.

Currently: SUPER Long!
If we fall under the 200SMA: SUPER SHORT!
Either way, RISK AND REWARD ARE IN OUR FAVOR TODAY.

Disclaimer:
This is not financial advice or trading advice. I am not a financial analyst or anything of that nature. This is meant to be educational or for entertainment, but only for those two purposes.

Note

Took profits on half of the trade when the short term RSI was overbought and the 5min chart was flashing negative MACD divergence.

Fundamental Reasoning for 50% sell:
1. Monday uncertainty. A three day weekend always adds political risk.
2. Earnings begins! We will be given a peak at the probability of The Bull Case, that positive earnings will spur buying and take us to new highs, when the first batch of earnings comes in monday. I am not betting on this either way, I will just be reacting to the information as it comes. There is an inherent risk here to being long, though, with earnings expectations already high. If they start to miss we could be in for quite a bit more correction. As I put the chances around 50/50 (laziness, to be honest), I took half off the table.

Technical Reasons for 50% Sell:
1. Overall market trend still uncertain. This market could still go either way, I am just (trying to) stay impartial and only trade from a risk/reward perspective.
2. Monday gap up/down. Who knows which way the futures traders will take the market. Honestly, I am assuming it is more probable to the downside then the upside due to the velocity of the upside swing we had on thursday. If we gap down, I will look to repurchase the rest of my long (as long as morning earnings don't disappoint), still using the 200SMA as a stop loss and switch to a short. If we gap up, I will need to see that it is because of stellar earnings before I buy any more, and I will still wait for a pullback.
3. Looking at the 5min chart, we have a new resistance which I had not taken too seriously before, as it only had two points of contact. When it made a third, that indicated a pretty strong trend. Coupled with the MACD divergence and how we were coming down from overbought levels, it seemed like a good place to take some profits.

Whats next:
A bullish sign is that during the session the 150 SMA went from resistance (in red) to support (in green). I will be watching closely to see how the price action reacts to the 150 SMA on monday. If it falls below it, as is very possible due to the two lines of overhead resistance and the .382 retracement acting as resistance as well, it may be a good R/R shorting opportunity back to the support line / 200SMA. If the 150 can carry the price action through the resistance lines, I would be bullish on a buy around the 150. If the price falls through the 150, I expect it to retrace TO the 150 and bounce off of it to the downside, as it has shown to do many times before while establishing support or resistance.

Once again, if the price falls below the 200SMA, all shorts are a go. If it falls TO the 200 SMA, I would once again be a massive buyer from the risk reward perspective. How many times have I said risk reward already in this write up? I'll work on that in the future... lol.

Usual disclaimer: This is for educational or entertainment purposes only and is not meant to be financial or trading advice. I am not a financial analyst, I just like this stuff. Not a recommendation to buy or sell, this is just my thoughts on how I might personally trade things.

Note

Update: Took profits on longs longs, went short at break of 150SMA. Downside target is around the 200SMA.

Trade closed: target reached

Target reached! Covered. Looking to see how it reacts to this 200 EMA/ MA Area for next trade. Will short if falls below 200 SMA, will go long if it maintains support.

Note

Watching to see how SPX reacts to 200SMA... if it becomes resistance, as it seems to have started to, it will be a great risk/reward short to the 250 SMA/EMA band. I am short and adding to short until price breaks 2593, which is basically the 200SMA with some very non-mathematical standard deviation added in.

Note

Woops! Wrong snapshot!

troyroy

Disclaimer

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