Indice S&P 500Short
S&P500 2/4/2024 Here is why i shorted Friday before the close.
Observing the S&P 500, I notice the beginning of what appears to be a Wyckoff distribution phase. I don't anticipate a flat consolidation at this level; historically, distribution phases tend to occur with a downward slope.
The key point to watch is when the price drops below the dashed white Choch line at 4903.56. If this occurs, it could lead to a pattern of lower lows and lower highs, indicating a bearish trend. The next significant level to monitor is the breach below the last market maker liquidity sweep, identified as a spring marked by the dotted green line at 4843.27.
My focus will also be on the reaction around the old market structure break at 4800, highlighted within the grey box. This level becomes crucial, and a sustained move below it could signal further downside potential. However, it's essential to consider that these observations would be invalidated if the price makes another upward move, surpassing the recent high at 4975.14.
A decisive break and hold below the grey box would be a significant bearish signal, potentially leading to a deeper dive towards the swing low on the weekly chart at 4663.04.
It's noteworthy that the current overbought conditions on the RSI are evident on both weekly and daily charts, and the monthly chart is approaching the 70 line. This suggests a potential reversal or correction in the market.
Considering the upcoming news events, the absence of high-impact news this week and the impending CPI release next week could influence market dynamics. Traders should stay vigilant and adjust their strategies based on evolving market conditions.
The key point to watch is when the price drops below the dashed white Choch line at 4903.56. If this occurs, it could lead to a pattern of lower lows and lower highs, indicating a bearish trend. The next significant level to monitor is the breach below the last market maker liquidity sweep, identified as a spring marked by the dotted green line at 4843.27.
My focus will also be on the reaction around the old market structure break at 4800, highlighted within the grey box. This level becomes crucial, and a sustained move below it could signal further downside potential. However, it's essential to consider that these observations would be invalidated if the price makes another upward move, surpassing the recent high at 4975.14.
A decisive break and hold below the grey box would be a significant bearish signal, potentially leading to a deeper dive towards the swing low on the weekly chart at 4663.04.
It's noteworthy that the current overbought conditions on the RSI are evident on both weekly and daily charts, and the monthly chart is approaching the 70 line. This suggests a potential reversal or correction in the market.
Considering the upcoming news events, the absence of high-impact news this week and the impending CPI release next week could influence market dynamics. Traders should stay vigilant and adjust their strategies based on evolving market conditions.
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I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
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