In terms of pure Frequency, the most frequent long reversal cluster is between 890 and 860.
Please notice how the reversal Frequency drops dramatically below the 860.54 level, it goes from 20% frequency to 4% frequency... this means that if you stay short below 860 you are taking a big gamble here.
Can we go lower than 860? Sure we can! But we stick to the odds here, to get some grip on the SPX's average behavior during "this type" of retracement down. So we are going to be long from 860 and we will add longs at each level below that price.
879.33 is the most frequent reversal level. It spikes out quite a lot, so it's important to take this into consideration in your trading plan.
Our 100% adjusted odds target (below) is set @ 780.96, it would take a 14.16% sell-off from yesterday's close to get us there. Should be conservative enough since we are not anymore in crazy-swings-crash-mode since a while.
As a general rule, when setting this level, it's important to follow a bit the amplitude of the market swings. Of course we cannot forecast tomorrow's swings but usually when the market has a certain rhythm, it lasts for a while, so it's important to tune yourself onto this rhythm to set this value correctly.
What we are trying to say is that 701.37 seems a bit out of rhythm (=too far for the current type of SPX swings/waves).
Please remember that the 850-860 area has offered quite a lot of support as of lately, as explained in the last Weekly report , so 860.54 is definitely a good support. If broken, it may open the door to a big plunge, but as you have seen on the Frequency Table above, the most part of reversals are happening above 860.54.
879.33 (below, highlighted in purple) has >70% odds to see a long reversal, with our settings. Quite good if coupled with the fact that 879.33 is also the most frequent long reversal level (see Frequency Table above).
Our 100% adjusted odds target (below) is set @ 780.96, it would take a 14.16% sell-off from yesterday's close to get us there. Should be conservative enough since we are not anymore in crazy-swings-crash-mode since a while.
As a general rule, when setting this level, it's important to follow a bit the amplitude of the market swings. Of course we cannot forecast tomorrow's swings but usually when the market has a certain rhythm, it lasts for a while, so it's important to tune yourself onto this rhythm to set this value correctly.
What we are trying to say is that 701.37 seems a bit out of rhythm (=too far for the current type of SPX swings/waves).
