The S&P 500 had a good bounce on our channel trend line which indicates that the corrective move which began on November 5th may be over for the month. As a result we are long on the SPX Index (from 4695) until it gets closer to our short entry zone – or we are stopped out.
With the short entry zone starting around 4790 we can place stops at around 4670 for an acceptable reward to risk ratio.
The eagle-eyed of you will have spotted we were previously long and decided to exit at 4686 a few days ago – that was risk management and a small price to pay to lock in profits where the Index could have gone even lower.
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