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$SPX once again fails to break the resistance. Another fall down is likely, read why!

Bear beats bullLast week the market broke the descending resistance (the top of the falling triangle) which gave hope to many investors turning bullish. I myself was also fooled by this market (again) into believing that we finally see a break out. Friday’s trading moved the markets into the new all-time-highs and I decided to reverse my weekly SPX trade from bearish into bullish.

But, last 10 minutes trading on Friday the market crashed again and sold off hard setting the trend to the downfall. Have I stayed tight and did nothing with my bearish trade on Friday, I would be out of the trade with a nice profit. Now I have a break even trade on moved two weeks away from now hoping nothing serious happens and I will be able to get out break even a few weeks from now.

I think more traders were convinced about the market finally moving out of the range and start finally trending. These violent moves up or down are quite frustrating making my weekly SPX trading strategy difficult to handle.

But I am persistent and want to move on and go on and improve my trading strategy and create gains.

Today’s trading was a disaster to all bulls. And it can be a game changer again. Let’s review the chart below why I think this can be a major problem for bulls.

SPX struggles again

As you can see a price action inside the circle, the market broke the falling resistance (the red line) of a falling triangle on Thursday last week. On Friday it continued up well. But today although the market moved up in the morning it crashed at around noon and wasn’t able to recover.

What’s important on this is that the crash happened at the all-time high resistance at 2120 level! The market moved higher above it, created a new high at 2125, but then crashed hard. See the daily crash action:

SPX crashing down

Although the intraday chart looks sinister we still may see a bounce tomorrow and trend continuation. There are two catalysts for a move of this market: one is AAPL earnings reported today after the market close, the second is the FOMC meeting on Wednesday if auntie Yellen makes positive remarks (positive for Wall Street) about FED stance on economy and rising interest rates.

As of now AAPL doesn’t seem to be moving SPX futures as it is still sliding down (/ES is at 2108.9 down -0.03). But as of this writing, futures are not as important as they will be tomorrow morning. And of course, Yellen may have remarks accepted wrong by Wall Street and this market can go to abyss.

I am still bullish, but caution is needed. If this market bounces tomorrow and moves higher (and it still is very well possible), the trade I have put on can be moved away to save it or even make money.

Happy trading and investing!

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