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Don't Push It !

Finally, SnP500 is approaching the daily 200ma target as if like magic or like a moth attracted to flame as traders used to say:

<< Bear Short Setup:

<< Bear Campaign:

>> ES Buy Setup:

>> Performance Review:

Since August 24 when we started the First Blood Swing Trade, I decided to highlight the Bearish View first introduced last May 2015 as possible guideline for both short-term bulls and bears.

The ES Buy Setup of August 29 provided a chance to execute a daytrade for the c-wave for the bulls and another opportunity for the bears to bank more profits.

Right now, SnP500 is a hairbreadth away from it's most formidable short-term resistance which is the 200ma.

<< First Blood Swing Trade:

>> Performance Review:

First Blood of August 24 is our swing trade for SnP500 now coming into a conclusion.

Will a Rambo II be the sequel we just have to find out later if the markets will actually perform according to the idealized bullish A-B-C or 1-2-3-4-5 scenario.

A retest/recovery of the 2134.71 is the most important part for the bulls to improve the probability that this is just a normal correction either a minor one of < 20% or even a bear market with a little more than 20% correction for a much bigger A-B-C down but not a massive 1-2-3-4-5 run down that can last several months to unfold and can go 30% to 50% correction.


Trading Strategies:

In Rambo: First Blood, he was apprehended by the police chief but escaped to the mountains. The police hunted him down and he hunted them instead finally giving the chief a warning 'Don't Push It'. But then the police called the National Guard to capture him. To make it short, let's say this is Part I and Rambo II should be Part II if SnP500 can execute the A-B-C up or 1-2-3-4-5 rally.

Right now, the objective is to take profits for the Swing Trade executed last August 24/25 for those who are still holding positions. Perhaps keep at least 1/3 positions just in case a 1-2-3-4-5 rally actually happens OR SnP500 just keeps spiralling upwards toward the May 20th high which is also possible. Or be patient and start another swing trade labeled as 'Rambo II' if Spx made a minor a-b-c down toward the 50ma Support + the Short-Term Major Support which is the better trading strategy for the bulls.

For the Bear Campaign, this is just an ongoing trade setup that's going well for the uber-bears. So far so good so what can I say?

Stop loss for the uber-bears is discretionary at this stage. Either use the 200ma or use the May 20th all-time-high as the hard stop if they want to pursue the Bear Campaign. Same technique for adding more shorts; wait for the touch-up to the 200ma Resistance before going short. Or wait for the first breakdown of the c-wave up which should last a day since today is a continuation bar and traders will be expecting at least another intraday rally tomorrow morning which is a Friday and a 'Play Safe Day' to take some profits off the table in the late afternoon before the day is over. If Monday proved a big rally, avoid adding more shorts.

For now just try not to push it far beyond the short-term boundaries for both bulls and bears. We're still in a wide trading range with no high-confidence pattern that can give either side a definitive edge.