A BEAUTIFUL ROUNDING TOP FOR MR. TRUMP
Index seemingly forming a nice, even rounded top (a reversal formation)
What I particularly like about this one:
It's nice and even
It has been building for quite some time (4 months)
It is built around a fresh historical high (this makes it more relevant)
It completed yesterday a few points off the critical MA200 support
It contains symmetrical breakouts (green circles) and breakdowns (red circles) on either side
It completes at the end of the week and just before a major catalyst (elections)
MOMENTUM: DOWN-PAUSE-DOWN
The index is down 7 sessions out of the previous 9
Of those, the past 6 have been sequential down days
We are now approaching oversold territory (RSI <30) but not dramatically
Expect some "breathing space" ahead of the week-end
Expect a break below the MA200 and rounded top neckline (2,082) some time next week
If the support is broken, expect further downside
NEXT LEVELS
Potential rebound to 2,122 from here (+1.6%)
Main support at 2,082
If broken, head straight to 2,074 and then 2,063
HOW TO TRADE
Short SPY
Buying SPY puts
Buying VXX