S&P: Another Downward Correction Very Possible

www.investing.com/analysis/s-p:-another-downward-correction-very-possible-191729

By Alexandros Yfantis | Nov 13, 2013 06:43AM ET

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The S&P is trading near its highs in the vicinity of 1765-75 area. The current decline to 1747 was in three waves and this implies that there is no impulsive move down. This doesn’t cancel the possibility of another leg down. We believe that the correction is not over yet, and we should expect prices to at least reach the 38% Fibonacci retracement at 1725.

S&P 500 Hour Chart

The recent decline as shown above is clearly corrective. However, if prices break below 1760-55 support, we could see 1746 being tested and increased probability of another new lower low towards 1725-30. We may be bearish for the short term, but we are looking for long positions if a larger correction takes place and our longer term support level is not broken. Trend is currently neutral for the short term, but bullish for the intermediate and longer term.

S&P 500 Daily Chart

Our view is that we could expect the index to make a move towards the 38% retracement at 1725 or even lower towards 1700, and still this we could label it as buy opportunity. Short term stop for bulls will definitely need to be the 1746 low although a sell signal will be given if prices break below 1755-60. We do not feel the risk reward favors bulls at 1770 area, but we would prefer to take a short bet expecting the correction to complete in lower price levels.

Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.

Disclaimer: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.

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S&P: Another Downward Correction Very Possible

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