She’s Waiting
Inflection points are important alert zones to be aware of when analyzing the
market. They give you a hint as to what might happen, but they are not a crystal
ball. What they do is focus your attention on the price action, then you as a
trader, can react to the market depending on how the market reacts at this zone.
The S&P 500 Index
(
$SPX.X |
Quote |
Chart |
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PowerRating) is nearing the 50%
retracement of the May high to the September low, after moving through the 61.8%
retracement of the August high to the September low. Normally, converging
retracements such as this, act as resistance, and a tradable move back to the
downside is the result.Â
Don’t be too quick, however, to get short at this point.
Yesterday the index made a breakout over a triple top, so we have conflicting
signals right now. What you can do is be aware of the action here, and see how
it plays out. Will it bounce back down, or will it blow through the retracement
levels? Watching and waiting could keep you out of some losing trades, and allow
you to get in the right side at the right time.
Until tomorrow,