Not to swing at every pitch requires a lot of discipline. If one takes only the best setups, with a safety margin, one can't go too far wrong. (Sounds like value investing, doesn't it?!) The S&P500 maybe providing a short-term bearish opportunity. First, here's the Daily chart:
My last update noted a trendline break with support at 1300, and suggested that we might see a shorting opportunity. Since then prices have whip-sawed impressively, and failing at the back-test of the broken trendline. Thus resulting is what could be a bearish Rising Wedge, as shown on this 30-min chart.
Top of the wedge is at 1332, bottom is the rising trendline. A break eitherway could be bullish/bearish. But Elliott Wave Theory suggests that after an impulsive decline and a corrective upmove, there should follow at least another impulsive decline.
Strategy:
1. Taking a short-position at the top of the wedge, with RSI close to 70 on the 30-min chart(for margin of safety), with a suitable stop just above. In case of decline below the lower trendline, looking at a target of around 1275.
2. In case of a break above the wedge, i won't be taking any long positions until clear of recent highs.
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