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Trade Idea: S&P 500 Short (15/08/22)

The following post is on what I believe to be a simple yet effective trade idea that I myself will be acting upon. My idea is to short the S&P 500 for the reasons outlined below:

Fundamental: Following 4 consecutive green weeks for the S&P 500 there is a bearish sentiment in the air. As inflation sits near peak and the economy enters into a recession there is much doubt about this trend continuing much longer. The Fed’s minutes on Wednesday should shine some light on the stance of policymakers but is unlikely to give the necessary nudge the bulls want.

Technical: On a technical standpoint, despite recently breaking the 200MA (a bullish signal) there is major resistance at the 4300 level when looking at the weekly timeframe. Trading volatility itself is slowing down among the constituents of the S&P and the RSI indicates the S&P is heavily overbought. Given that we rose in 5 waves to this recent high, the laws of physics attest that we must go down in 5 waves.

Chart: Joe Champion

Update (22/08/22):

Shorting the US500 (S&P 500) with entry at 4311. The Index now stands at 4182, with a 3.03% gain on the trade idea.

Key Economic factors which validated the move:
– Traders continue to fear the Fed’s aggressive rate hike plan.
– Mixed US Retail Earnings, pushing down share demand and consequently share price.


Trade Idea Gain: 3.03%


Analyst: Sulaiman Syed Naqvi


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