S&P 500 - Losing Strength?

7 thg 7, 2023

I do not post stock charts often, but here we see a very clean bearish setup forming on the daily for the S&P500. Price has been rejected twice around $4,500 (creating a double top). Followed by the RSI creating a lower high (bearish divergence).

This usually signals bears are gaining control of the market as the strength is decreasing while price remains higher or the same.

This trade idea would be negated if price closed a daily candle above $4,500 and would proceed to the 0.786 ($4,540). If price does not get back above $4,500 the you have an amazing RR with a stop loss within 0.7%.

Since, I do not watch the S&P a lot your take profit level to the downside would be up to you. A perfect retracement to the 0.618 would bring price around $3,900 and give you almost a 19:1 RR ratio!