S&P 500 Close to the Sell Zone

Murray Dawes, Editor, Alpha Wave Trader

[After predicting the correction in prices last week, Murray points out the key levels to keep an eye on going forward as this sell-off unfolds. Click on the picture to see what comes next in the S&P 500.]

In last week’s update, I pointed out that a correction in the S&P 500 was close and I showed you where the market should bounce from if prices did sell-off. Prices collapsed as expected and the low in the E-mini S&P 500 was right in the buy zone of the most recent wave up. Exactly where I showed you prices would bounce from.

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Now that the weekly momentum has shifted to the downside, I expect there to be further volatility going forward and the current rally should run out of steam around 2950–2990. I’ll be waiting for a daily sell pivot from that zone and if it occurs, I will be planning out my trades to take advantage of it. Because the next leg down in this current weakness could be a big one.

There are now dominoes set up beneath the market around 2700–2775. If prices break below those levels, volatility could go through the roof.

We have a clear line in the sand above the market. If prices break out to new all-time highs from here, you don’t want to be short. Above 3050 could see the ignition of a blow off rally to the upside. So if you are planning to get short the E-mini S&P 500 up in this area, you know exactly where you need to cut and run.

The targets I have to the downside if 2700–2775 can’t hold are all the way down near 2500, so the risk/reward on offer is great.


Murray Dawes,
Editor, Alpha Wave Trader

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Murray Dawes is the Editor of Pivot Trader and contributing Editor at Money Morning. He was one of five, from 5,000 applicants, chosen for a graduate position with the Swiss Banking Corporation — now part of banking giant UBS. The bosses quickly cottoned on to his potential and pushed him up the ranks as a futures broker on the floors of the Sydney Futures Exchange. Murray later broke out on his own and developed custom trading systems to trade leveraged financial instruments like futures. Due to his success, Murray became the ‘hired gun’ trader for Australia’s rich and famous. Today, Murray runs a trading service through Fat Tail Investment Research to help everyday Aussie investors use his advanced trading methods.

Money Morning Australia