S&P traded aggressively higher for the past week, invalidating our short position and strategy. Futures got adjusted, and right now we are trading around 2000 levels, which correspond to 2010 levels of one week ago when futures were not adjusted.
Even though we were stopped out of the position, we remain short biased for the long term in S&P 500 futures until 2060 area is taken out. Futures stopped exactly around 100% extension levels and are waiting for direction from FOMC statement and FED interest rate decision.
In the event that 1943-1945 level is taken out aggressively, we might test even lower levels. Up to now, the situation is quite unclear for opening new long term positions especially with the Interest Rate decision ahead, thus we are awaiting confirmation while doing intraday trading with tight stops.
The A-B-C count is in tack still, however it might as well turn into an impulsive if the highs established are taken out aggressively.
In the event that previous high is taken out in an impulsive manner, we should be testing 2100 levels soon and we expect aggressive buying of the US market mainly due to fear of the retail investors/traders of missing the rally.
Long position in S&P 500, or SPY (ETF) in these levels (1999-2000)
Stop Loss = 1995.
Target 1 = 2021.
Target 2 = 2031.
Target 3 = 2040.