Despite the fact that the S&P is still largely bullish and a lot of data point to the upside, the truth is that currently the SPX has broken a very key trend that was tested many many times. It hasn't had a 10% correction since September 2020, while it has gone up 42% since its September 2020 low and 109% since its March 2020 lows. The truth is that it could keep going and I think it will go higher medium to long term, but I just feel that it will go to test 3900-4000 before going even more parabolic.
Up until now most were going long on this very obvious trend. Too many perfect bounces on the Monthly Pivots + Diagonal + 50 DMA. Now all these are lost and they could turn into resistance after being support for so long. Of course the really long term trend is bullish and this might just be a trap. A trap to make everyone think the big trend is broken, only to send it higher.
Essentially even if we don't win this trade, the R/R is very attractive. It is 5:1 and I think this trade has at least a 30-35% chance of winning. So if we consider the odds of this trade being a winner and the R/R we can clearly see that his trade is worth it.
Up until now most were going long on this very obvious trend. Too many perfect bounces on the Monthly Pivots + Diagonal + 50 DMA. Now all these are lost and they could turn into resistance after being support for so long. Of course the really long term trend is bullish and this might just be a trap. A trap to make everyone think the big trend is broken, only to send it higher.
Essentially even if we don't win this trade, the R/R is very attractive. It is 5:1 and I think this trade has at least a 30-35% chance of winning. So if we consider the odds of this trade being a winner and the R/R we can clearly see that his trade is worth it.
