The monthly S&P500 chart reveals an impressive 2009-2018 bullish trend. Near the 3000 level traders are trying to find a top in US stock market and eventually a risk-off market environment to come in the next days and weeks.
We will use again our top-down trading analysis to get to more insights. On a weekly chart we can see that the price action is still below the falling trendline and also the 34 WMA 2687 level. This level is now acting as a resistance for the upside continuation and also as a downside support. So, you should look at this level as a key point for short trade entries or long trade entries.
On a Daily chart, a closer look indicates the whole 2680-2710 zone that is acting as a resistance for the upside continuation, and also is acting as a downside support. Based on a possible bearish monthly reversal, traders should look first for the short trade entries on a daily close or for an intraday bearish price action with the SL just above the 2710 level. In case of a daily close above this level, a new bearish swing down to 2600 will be invalidated.
A risk-off market and a possible extended pullback into the 2300 level will happen only in the case of a daily close below the 2600 level.
Happy trading! (click on the chart to enlarge it)
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