S&P500 Short-Term Update |
S&P500: 1122.91
Short-Term Trend: downtrend
Outlook: As expected S&P500 rallied twd the 1210 level but failed to move abv there and then declined sharply on Thursday and Friday. With this move lower, we have a strong sign that the downtrend from the July top has resumed. If correct, weakness twd 1060 and possibly twd 1020 is expected. Since the market is heavily oversold now, I would expect to see some kind of a bounce from the 1060/20 area.
What's the chance of a double bottom at 1100? – well, that's possible, but not very likely now. The daily chart is in strong downtrend, VIX is rallying (there is no spike now) and Nasdaq 100 is leading the market down. Under such conditions usually the decline continues. if houwever we see a move abv 1210, then a rally twd 1250/60 can become likely….
Strategy: If already short, you can favor holding short with a target near 1070/60 using proper risk-management. If not short already, it is probably late to go short now, imo.
About the author: Alexander Nikolov
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