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CFD: Ideas You Can Trade - USSPX500 Less Bullish After Channel Lost

Posted by Steven Hatzakis on Jul 2, 2015 1:35:00 PM

USSPX500: Bullish channel lost again as resistance around 2100.0 creating ceiling to further upside, and with support over this week's low 

The daily candle chart below shows the medium term price history of the USSPX500 contract for difference (CFD) which is trading near 2070.2 around time of publication and near session lows today ahead of the weekend holiday in the US.

The USSPX500 CFD aims to track the S&P500 Index which was last reviewed in Ideas You Can Trade on June 10th after the support line of the medium term bullish channel (point 4 in blue on chart below) had failed and a bounce followed from 2060.0 - which enabled the index to regain the bullish channel.

Since then the market has been sideways and choppy - with global markets volatilie - and after losing the bullish channel twice since then. The trend seems to have become more bearish as the shift out the lower side of the channel persists. Support should be tested again above 2050.0 near this week's lows, and if support fails then 2040.0 should be the next downside target. 

For the bullish channel to be regained anytime soon - the index would need to jump back towards 2100.0 in the days ahead - and which could come swiftly considering the already-heightened market volatility. The overall trend still remains quiet bullish - however, the longer the index is below the bullish channel the more the channel loses it's affect - at least in the short term -as the trend would therefore become more bearish (the longer it is out of the bullish channel).

Below are examples of how to trade a bullish continuation or a bearish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 2087.0 with a Limit to take profit @ 2105.0 and a stop-loss @ 2069.0 Risk/Reward Summary: Limit risk = +18.0 points profit / (-18.0) Stop-loss risk = Gain to Loss ratio = 1.00

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 2068.0 with a Limit to take profit @ 2054.0 and a stop-loss @ 2082.0 Risk/Reward Summary: Limit risk = +14.0 points profit / (-14.0) Stop-loss risk = Gain to Loss Ratio =  1.00

Short term daily candle chart:

USSPX500Daily July 2 2015 note

 

Topics: US Stock Market, S&P futures, SPX, $SPY, contract for difference, USSPX500, technical analysis, cfd, Forex, Ideas You Can Trade, Wall Street, Standard & Poors, S&P500 index, SP500

 

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