I have been waiting for past 2 months to see some setup like this and finally it happen.
Picture below show S&P 500 which undergo a strong price rejection after it reach 2380. We can see price face some difficulties to reach higher.
We can see a potential distribution at 2370 to 2380 area after a price rejection at 2400 few weeks ago. Do take note since election, S&P500 has a good run and earn close to 20%. This is like an easy profit for big players for this first quarter of the year. Market has been good to them.
Currently 20MA is being violated although the chart still look quite bullish with 2360 holding well so far. Next step we can see on 30MA where it hasn’t been violated. It should be around 2357 area. Once this break, we can expect the price free fall to 2325 to 2335 area where 50MA lies.
This kind of setup might give a clear sign to all type of traders like reversal, day, swing, supply-demand and etc where signal has point to them for a good entry and time for trend follower to lock their profit and exit their trade.
With supply over-flooded and demand weakening, it is common for price to plunge and reach next potential demand. We shall see where next support lies to see how big this potential correction will happen.
Till then, stay safe and happy trading and investing!