Kill Zone Reversal Possibility on SPX
מעודכן
As SPX approaches the previously un-violated overhead resistance trend-line (in green)...SPX seems to have bounced. This means that the overhead resistance is now acting as support. Of course there are always two scenarios (it will go up or it will go down), however, The breaks to either the upside or downside are significant in their interpretation.
First, if the SPX continues to bounce off of this support and go higher, this is an extremely bullish outcome. Why? Because SPX will have successfully completed a "kill zone reversal." The kill zone is the green circle on the chart. A kill zone reversal is significant because it shows that a majority of market participants bought at or near the green overhead resistance when it broke the first time. Thus, they will probably not be selling near it anytime soon and the market will continue up. If SPX goes below the green trend-line, this is a bearish indication, as the support broke and there are no close resistance levels.
In short, if the green trend-line holds, then buy SPX calls. This is a shorter term trade until further confirmation. (1 week exp)
If the green trend-line breaks down, sell SPX calls. This is also a short term trade until further confirmation. (1 week exp)
For the short term I have a more bullish sentiment based purely on technicals. Fundamentally, this should be headed back down to 2900-2800 levels because of China trade talk fears.
Good Luck!
First, if the SPX continues to bounce off of this support and go higher, this is an extremely bullish outcome. Why? Because SPX will have successfully completed a "kill zone reversal." The kill zone is the green circle on the chart. A kill zone reversal is significant because it shows that a majority of market participants bought at or near the green overhead resistance when it broke the first time. Thus, they will probably not be selling near it anytime soon and the market will continue up. If SPX goes below the green trend-line, this is a bearish indication, as the support broke and there are no close resistance levels.
In short, if the green trend-line holds, then buy SPX calls. This is a shorter term trade until further confirmation. (1 week exp)
If the green trend-line breaks down, sell SPX calls. This is also a short term trade until further confirmation. (1 week exp)
For the short term I have a more bullish sentiment based purely on technicals. Fundamentally, this should be headed back down to 2900-2800 levels because of China trade talk fears.
Good Luck!
הערה
Looks like the kill zone worked perfectly. bounced hard off of lower support and confirmed bullish sentiment. Continue watching this will probably keep going up.
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