SPX – Looking Ahead…

We are already looking to next week with regard to where the S&P 500 Index (SPX) trades. Please observe the chart below.

Even if SPX musters a close higher over the next day or two based on oversold conditions, price action would still be contained within the ascending wedge pattern outlined with blue dashed lines. We think this wedge pattern provides a higher probability that SPX will break down to either test the ascending trendline or to undercut it and the prior low at 2532.69. Only until this double bottom occurs in either of the scenarios highlighted by the red arrows will we be ready to add long positions in the ShadowTraderPro Model Portfolio. As always, patience and money management is key.

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The full version of this article appears in the ShadowTraderPro Swing Trader newsletter which is published daily. The Swing Trader newsletter delivers value to its followers on multiple levels. The newsletter stands alone as either a purely informational vehicle for those who like to find and trade their own setups, or as a daily resource for trade ideas. These ideas are listed in the Bulls & Bears section and may also be traded live via MyTrade alert by our team. Each day’s edition contains commentary on either the broad market or a particular stock in focus (Looking Ahead), a heads up on upcoming economic and corporate data, and a look Under the Hood, listing what happened with market internals in the previous day’s session, along with /ES Pivots and Market Profile levels for the current day. The newsletter is sent out at night assuring that users have ample time in the morning to digest the information regardless of how early they get up!
Dovetailing with the newsletter are specific trade recommendations via MyTrade which are sent out as we find them. Long/short equity trades are generally concentrated on issues showing extreme relative strength or weakness to the market. Selections are further narrowed by volume convergence/divergence, sector analysis, and technical events such as candlestick patterns and trendline reversals. ShadowTraderPro uses both daily and weekly charts to scan for short to medium term swing trading opportunities with a time horizon of 2 days to 4 weeks. Clients will receive detailed posts for each and every trade entry and exit, clearly explaining the technical analysis behind each move, including any changes to stops or targets. These trades get added to the ShadowTrader Pro Model Portfolio, which is updated nightly and included in each day’s edition of the Swing Trader.