S&P 500 Correction Expectations - How To Position For Short Opportunities

In my last article relating to the S&P 500, published here on Seeking Alpha, I discussed our expectation for a move in the S&P 500 to the 2935 region, before turning down from what we are suggesting is an overall B-wave high. When it broke over this level and hit the 1.236 extension level, it introduced the potential for an overall ending diagonal that could extend to 2,978 or 3,010. In order to invalidate this potential, the S&P will need to break below 2,785, which would provide a very strong indication the overall top of the B-wave is concluded.

However, the forgoing remarks are not intended to suggest that we believe the higher targets will be hit in the S&P 500. In fact, the move down from the 2,955 region best resembles a leading diagonal, suggestive that any retrace against this move down offers investors a low risk to high reward short entry. It is for this reason that we sent out a trade alert to our subscribers near this past Friday’s high to position into shares of ProShares UltraShort S&P500 (SDS). This will be our third attempt at shorting the US equities market, taking two small losses and realizing one small gain, allowing us to provide attempts for the breakdown with minimal loss exposure for what we expect to be a very large gain.

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