S&P 500 Target Reached – Take Profits and Go Short

From  March 2009 to January 2010 the S&P 500 (SPX) had a growth rate of 72.5%. Projecting that portion of the secular bull market kickoff phase to the supposed termination phase that began in March 2020 targeted SPX 3781.

The daily SPX chart courtesy of Trading View illustrates bearish momentum divergences.

Today 01/06/21 the SPX reached 3783. Daily RSI had a double bearish divergence, daily MACD – line had a bearish divergence  and MACD Histogram was below zero. 

Momentum is bearish.

Price has reached important Fibonacci resistance.

Time –  occasionally there are major or minor peaks soon after the turn of the year.

With bearish evidence from three of the four market dimensions its time to take profits.  Investors and traders are holding 50% long SPX non leveraged funds from the open of SPX trading on 11/03/20.

At the open of SPX trading on 01/07/21 investors and traders – sell the 50% position to lock in profits.

For traders – short non leveraged SPX related fund on the open of SPX trading 01/07/21. To track recommendations on this site a 100% position equals $10,000. A 50% position equals $5,000.

Use SPX 3900.00 as a stop loss for 50% of the short position.  Use SPX 3970.00 as a stop loss for the second 50% of the position. 

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

<span>%d</span> bloggers like this: