Key Resistance: 3990
Key Support: 3860
The SP500 has rallied strongly since the last pullback from mid February to the beginning of March (-6.16%). After that 2 week pullback it rallied 7.17% to all time highs to see another pullback to last week´s lows (-3.41%).
It has now retested and is in the process of rejecting the very same level it hit on March 17th, breaking in the process the short term bullish structure and printing a big bearish engulfing candle (4H).
Shorting equities in today´s reality of massive rounds of quantitative easing can be counter intuitive but we´re not trying to position ourselves short here for a awing trade. Sellers are stepping in at these highs and the probability of another leg down is high given the fact that big buyers are not going to step in here, they will wait for price to retest the lows to jump in.
Having said that, we need price to break the previous lows and the weekly pivot to get triggered and we are looking to take profits at the previous week´s lows which is also the 50% retracement of the last impulse.
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