SP500 Short Opportunity

1 Nov 2022

Hi traders,
SP 500 is in a corrective cycle that started at the beginning of 2022. We do expect further down to end the WXY corrective structure. This will create new lows and it will break down the 3480 level.

Considering that, we can take advantage of it by trading the end of B in the intermediate degree (blue) and riding the whole wave C before ending the corrective cycle WXY of wave 2 and starting the new bullish cycle.

Short potential idea:

Entry: 4144
SL: 4442
Target: 3210
Risk: max 2% of your account

Always keep in mind that risk management is, at least, as important as the entry-level or the SL. Remember the quote “If you do not manage the risk, you will not have any risk to manage”

The market is always repeating the same type of defined structures. There are only two main wave types: the motive wave and when the motive wave ends it starts a corrective wave. Within them, there are only 3 motive waves structures (Impulse, leading diagonal , and ending diagonal ) and 5 main types of corrective structures (ABC, WXY, Flats, triangle, WXYXZ (triple correction))

Learning them and being able to spot them in the price action graphs will completely change the way you trade as these structures will provide entry point areas, invalidation levels, and targets for the trade.

Have a safe and profitable trading day

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it is only the explanation of what we are going to do and it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.