Are Bulls Ready For A Comeback?

SPX is trading again around and below 2900. Price has pulled back more than 40 points after a strong move higher from 2855 to 2958. Price is now at the 61.8% Fibonacci retracement level of this move and we usually see reversals at this point. This does not mean that a reversal WILL happen but we say that it is highly likely. If this is the case then we focus on the bullish scenario of a higher high in price and we look next for a break of recent highs at 2958. This would trigger our next target at 3000 points and higher. Price now is below the Ichimoku cloud in the4 hour chart and challenging the cloud in the Daily chart. So the 2890 area is important in many aspects.

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Breaking above 2958-50 area will also signal the break out above the 4-hour cloud. This would be a bullish sign. All this of course in the event we see a reversal from current levels.

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Conclusion. I would try a small long position at current levels with stops at recent lows at 2955. I would add on a break above 2958. This is an area of increased probabilities of a reversal to the upside….thank you for taking the time to catch up on my thinking

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