Current SPX Position: Long at 1691.50
Next Action: Stop and go short at 1684.26
System Score: 4=Bearish=Trend Score + Turn Score=4-0
Proposed New Score: 44%=Neutral=Trend Score + Turn Score=16+28
The Score is now bearish so the System will go short upon a break of 4hr support at 1684.26. If SPX gaps down near 1680, the System will enter short there, but a gap of more than 0.5% below 4hr support will lead to an initial half-entry and then full-entry upon 30%+ retracement. Of course, if SPX rallies at the opening tomorrow, the System will stay long with stop level trailing. If SPX breaks down, I'm still expecting 1660ish to be the initial target followed by a dead-cat bounce to relieve technicals and then a deeper fall. But, even if I'm right, it could happen very fast because SPX has been in a tight 2% range for 4 weeks as a member pointed out. This occurred in August last year too at the System inception. In that situation, SPX rallied about 80pts in less than 9 trading days and then fell 10% over 2 months. So, the consolidation should be over imminently, and that would generally benefit a trend-following system like this one. One reasonable story to paint is a drop into early September with a huge rally ensuing shortly before/during/after the Fed announces its tapering decision on September 18th. Good fortune.
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