$SPX: Early Warning: 10% Drop Setup

$S&P500 $SPX #MACRO

I keep posting micro long setups for weeks and they have been working fine. But we are quickly approaching a traditionally bearish period of time.

look at the normal seasonality chart of S&P 500:

You can see a very bearish seasonal decline off a peak that is normally made in the middle of September or at September OPEX (third Friday of a month).

I think that bulls live on a borrowed time here:

S&P Daily chart

S&P is meandering inside the Red Box, Bulls can push it higher to tag the upper edge of the Red Box at 6,640 (target for SPX not ES-mini). Accordingly, bulls could push ES-mini up to our target at 6,675 (see the ES-mini update posted this morning).

But there is a very limited upside left from here. Bulls can squeeze 200 more points of upside from here.

But that bearish macro setup allows bears to produce a scary quick drop down to 5,800sh.

The ideal scenario would be a textbook pump-n-dump, a spike higher on FOMC decision scheduled on Sep 17th, right before the Quarterly OPEX, followed by a brutal bearish reversal that can happen the following Monday Sep 21st. That bearish setup argues for a quick and scary 10% drop down in S&P 500.

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