Here is a quick blog from our Live Trading Room host, Dan Hussey. Take a look at how to manage your risk by using inflection zones to your advantage. The Live Trading Room is held daily from 11:30 AM EST until 1:30 PM EST, join Dan there for more insight into these proven methods of trading.
The $ES_F (SPX futures) traded its equal legs inflection zone in a three wave corrective Elliot Wave structure. We highlighted this area as the next potential resistance for the SPX in previous Live Trading Room (and in the daily recap for subscribers). The 1884 inflection zone was also the unfilled gap from Thursday, May 15th.
$ES_F 60 min – Equal Legs Inflection Zone:
While the larger Elliot Wave structure is still bullish, as are the longer term technical’s, the inflection zone at the 1884’s gave us an early indication that the rally may have only been a B or X wave of medium term structure. Downside targets for the equal legs short setup are at 1855. Downside support begins at the 50% long (1850), and the better equal legs support now at 1845.
$SPX 60 min – Elliot Wave Structure:
Be aware, the larger Elliot Wave structure suggest more upside, and there is still an opportunity for the S&P500 to continue its rally to new highs without trading lower. The inflection zone has however gotten a reaction, and this is the first sign of a potential adjustment in the structure.
We utilize Elliot Wave in conjunction with technical’s to provide the best Elliot Wave Analysis of the markets. Remember, trading isn’t about how much you make, or being right, its about managing risk and how much you DO NOT LOSE!
Regardless of larger Elliot Wave structure or trends, inflection zones have a high probability to trade from their ENTRY areas to their T1 (first target, in this case the 76.4% line). We exploit this statistical advantage by using this inflection to manage our risk, while looking for setups in the direction that the EWF Elliot Wave charts suggest. Join us daily from 11:30 AM EST until 1:30 PM EST.