X_TexI agree that 1310, or a 15 point stoploss might work. It's...

X_Tex

I agree that 1310, or a 15 point stoploss might work. It's very tight but I reckon if you wan't to go long now you've either gotta go big with tight stops or smaller with a loose stop (but not as loose as 4 plus times average true range.) I'm medium to long-term bearish SPX, so a small long position with wide stops is contrary to that view - I wouldn't take it.

So...if we go big with a 15 point stop, we could follow the immediate rebound and buy in as soon as possible, or even allow SPX to drop up to another 15 points (to 1310) before we enter. Anything lower than that runs our stop too close to the next major support zone, where the stop would be sitting just above support (rather than just below support, where we would prefer it.) I don't think we want a long stop in or just above the 1250 to 1280 zone, which is around the 38.2% retracement where I would expect major support.

A 15 point stop would allow for a pretty decent sized position and a minimum profit target of only 45 points (assuming a 3 to 1 risk/reward ratio.) 45 points is very gettable - even in a couple of days.

I think a reasonable short-term profit target might be 1400 - around the 1385 23.6% retracement and the 1405 support/resistance area. So ... a position taken at around 1325 with a 15 point stop and a successful profit target of 1400 gives a 75 point return at a risk/reward ratio of 5:1. I'll take that! Of course if we can get our entry a little lower, so much the better. With a target of 1400 we could not enter any higher than 1355 or our risk/reward ratio drops below 3:1.

Anyway...hope you get a good posi Tex.

Regards

- H

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Trade the market you see - not the market you hope for!