S&P 500 Daily Feb. 02, 2010
The daily chart of the S&P 500 index shows the predicted bounce, which should bring price up to either the 50% retracement of this downswing (at 1110), or a backtest of the broken wedge.
click chart for larger view
Note: this analysis is valid for trading on Feb. 03, 2010. A more recent one might be available here
Dear Hell,
You determined 1110 as the 50% retracement level. How do you measure this (apparently as the upper green line and the low established from where we went up. Do you always do it like this?
Kind regards,
P
Hi there,
I'm not sure I understand you correct. The 50% retracement is simply measured from the top to the low of a few days ago, the only correct way to draw it. I think you know this but to be sure: did you click on the chart to see the larger version? Then you can see clearly how the retracement is calculated.
Or do you want to know why I think it might bounce there? Because our US friends like their 50% retracement levels a lot.
A possible swing play here would be to short just below the 50% retracement level with stop above the 61% with target around 1052. An 11 point stop for a possible 59 point gain - I like these odds.
Regards,
Hell7