A New Week Begins

The cash S&P500 formed an inside day (higher low and lower high) on Friday. A new upward price pulse has begun from the 1546.72 low made on Thursday and we are now short SH in our investopedia trading account.

Since I am thinking that the immediate trend is down it is time to come up with a few price targets – the Fibonacci ratios on the chart (blue and red dashed horizontal lines). The first is at the 1527 level then 1497 and 1472. We then add Gann levels (the solid horizontal green lines) and look for a match. This leaves us with the lower 1497 and 1472 levels. Finally, if the current decline is in fact an Elliott wave iv’, then we can not overlap wave i’ at 1479.40. This leaves us with just one target at the 1497 level.

With a stop loss set at 56.81 we now wait for one of two events – we are stopped out or the market begins to head to our target by breaking below last Thursday’s low.