As the whole market is red since this week, so is the indice market. S&P 500 is in the downtrend, forming lower lows and lower highs. Also, the market is continuosly breaking its support levels. Earlier, it broke its strong support level at 4080, which now has turned into a resistance. This resistance will be our short area after the confirmation of the rejection, till the lower support level where we will profit ourselves. 

The market has formed a bullish pennant. This formation tends to be in need of a breakout buy from the above trendline. Although the trend is bearish, we will be looking at the down side move more than the upside, therefore, anticipating a rejection from the upper trendline. This trendline can also fakeout the breakout buy towards the resistance level and then fall back.

The retracement level 75-78.6% is in confluence with the resistance level. This area is going to act as a strong foothold for the continuation down.

Both the EMA's are bearish with a bearish death cross. There is a probability that at the resistance level, we might tap the EMA 50 as a retest. Then, we will have 3 confluences at the resistance to take a short position. 

Oscillators present a bullish divergence on both the rsi and cci. Currently being in a bearish region, we anticipate that the divergence has the tendency to push the market up towards the resistance. At that level, we will see the market at the over bought region and also in confluence with other technical factors. 

The trend on SP 500 is bearish and the technical factors at the resistance price of 4080 really favor the idea of a short position from this region.

S&P 500 shorts from 4080

May 12 2022

Take Profit +4.28%

Holding time 6hr

4038.38

Entry price

3865.73

Take profit price

1