S&P 500: Bullish But You Will Need To Be Patient

Good morning traders.
As I just posted in the Slack Channel markets remain poised for moves....but nothing just yet.
Let's first start with the S&P's.
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S&P 500: bullish....but will require patience. The price action off the August 29th highs is corrective and complex. Perhaps a "leading wedge" or "diagonal triangle"? Regardless, to me it is corrective and that tells us all we need to know. What remains unclear at this point is where prices will find support and build the steam to move higher.
Wave (2) corrections will typically retrace 61.8% the length of Wave (1). So, in this case, we have only retraced 23.6% of the move...leaving 2778 a distinct possibility.
A couple of notes regarding the chart below:
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GREEN shaded area represents the Fibonacci Support Zone (FSZ) for the Wave (2) retracement
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BLUE shaded area represents the Fibonacci Support Zone (FSZ) for the recent move higher off the August 15th lows
Bottom line....patience. Some clients, myself included, should consider slowly scaling into long positions via the futures and/or SPY or PDP. Rather than trying to pinpoint the exact low, nearly impossible, we have our general range to work with. Keep the position size modest. Once prices gain traction and begin to turn higher in an impulsive manner, would then consider adding to round out the position.
For now, we only have a Dec 21 288/310 Call Spread on that was initiated last week at $7.28, last traded $6.92
To learn more about Aspen Trading Group and to download "The List of the best trading resources David Floyd recommends", click here
To learn more about Aspen Trading Group and to download "The List of the best trading resources David Floyd recommends", click here
Author

Dave Floyd
Aspen Trading Group
If he lived anywhere but Central Oregon, where the trails of the Cascades mingle with the warm sunshine and fresh air of the high desert, Dave Floyd would probably be one of those guys who lives and breathes trading and analysis 24/7.


















