SPX500 registered its highest single day drop since the counter trend rally began from 2200. This was coming, and time and again presented here with as a classic case of Elliott Wave Pattern along with the conventional Head and Shoulder bearish reversal. Please find the summary of Wave Counts below: The drop from 3400 through 2200 unfolded in 5 waves, carving an impulse wave, Wave (1) on the chart. The subsequent rally has been in 3 waves, hence corrective, Wave (2) on the chart. Ideally, a 5-3 pattern is followed by another 5 wave structure towards the major trend, which is down in this case. If the above counts are correct, expect a sharp drop sub dividing into 5 waves towards 2200 and further, as Wave (3) unfolds. According to the conventional Head and Shoulder pattern, the Right Shoulder seems to be in place as SPX500 carves an Engulfing Bearish pattern on the weekly.
Strategy:
Aggressively bearish against 3400, targeting below 2200.
Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.
Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.
Strategy:
Aggressively bearish against 3400, targeting below 2200.
Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.
Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.