Range Trading Action

The S&P has been trading in a range for the last couple of months, and ended the 3rd quarter close to the bottom of that range. The first trading day of the 4th quarter has been positive 80% of the time, which suggests a green day for Monday. What we really have to look in our trading is to focus on a break of the range to either side. If we see the price breaking above 1230, the trend should be long and conversely if the price action breaks below 1100, the trend would be bearish for more selling ahead. On the other hand, the market can remain trading withing a range for longer periods of time, as we saw from February through July. Until the new trend is defined, quick profit taking is a must.

Wisdom

Trend trading is not a holy grail or a hyped-up secret black box, either. Beyond the mere rules, the human element is core to the strategy. It takes discipline and emotional control to stick with trend trading through the inevitable market ups and downs. Keep in mind, though, that trend followers expect ups and downs. They are planned for in advance.
According to an ancient proverb, "failure to plan is planning for failure." Trend followers succeed because they have implemented an investment approach that focuses on risk management and strict adherence to rules.

Death Cross

The death cross triggered this month will confirm if the market is unable to break resistance at the 50 EMA, in which case support at 1100 could be broken.

S&P Broke Support

Yesterday the S&P broke the head & shoulders support around 1260, indicating more selling ahead.
The next level of support is around 1175 and if that one doesn't hold we could go as low as 1060