Who’s down to trade the trends today?
I’m seeing a couple of neat retracements happening right now on the S&P 500 index and AUD/CAD.
Here are the levels I’m watching.
S&P 500 Index (SPX500): 4-hour
S&P 500 Index 4-hour Chart
Still bearish on the U.S. stock market?
Here’s a quick bearish pullback play I’m seeing on the 4-hour chart of the S&P 500.
The index is already in correction mode, testing the 38.2% Fibonacci retracement level on the latest selloff. This happens to be right smack in line with the 100 SMA dynamic inflection point that acts as another upside barrier.A higher pullback could take it up to the 50% to 61.8% Fibs that span an area of interest around the descending trendline and 200 SMA.
Technical indicators are feelin’ the bearish vibes also, as the 100 SMA is below the 200 SMA while Stochastic is indicating exhaustion among buyers.
If any of the Fibs are enough to keep gains in check, the stock index could resume the slide to the swing low or even lower. Watch out for that!
AUD/CAD: 4-hour
AUD/CAD 4-hour Forex Chart
Looking to trade corrections on a forex pair?
Check out this cool channel setup I’m seeing on AUD/CAD!
The pair has been cruising inside a falling channel with its lower highs and lower lows since mid-August, and it looks like another test of resistance is in the works.The top of the channel lines up with the 61.8% Fibonacci retracement level and .8900 major psychological mark, making it a prime spot for sellers to hop in.
Stochastic still has some space to climb before reaching the overbought area, so the correction could keep going until buyers are tired.
The 100 SMA is below the 200 SMA, after all, which means that there’s a strong chance the downtrend could carry on. Besides, the 200 SMA lines up with the channel resistance to add to its strength as a ceiling.
