The tech sector and USD with a hit on the indexes, what's next?

US stocks wiped out the entire weekly profit as technology companies entered a third consecutive day of loss. At the same time USD has advanced. Both factors contributed to the emergence of another worrying signal over the development of the indices.

Let's look at the SP500

Looking at the chart at the beginning of the week, everything seemed so promising for bulls, but technology companies and the strong dollar led to a turnaround at key levels, and this confirmed the strength of technical analysis. The price failed to break the short-term downward diagonal and formed a strong Price Action Shooting Signal - Shooting Star. In addition, the indicators also indicate that a new bearish wave is coming. Sequential counts a unit (of 13 possible) below - a signal for a new downward wave. DeMarker turned from an over-purchase zone and pointed downward - negative for the price.

Are the deals right now?

A trend from current levels will be at risk regardless of your market views - Long or Short. Given the facts I have listed above, Short is more likely, but to confirm this, we need to wait for a breakthrough in the basic diagonal, which in this case coincides with the cult 200SMA - a very strong level of support. In general, the situation involves risk positions with two possible inputs - from current levels or downwards. If we enter Short now, the stop must necessarily be away from the diagonal, since the diagonal has been seen for a long time and the level suggests a strong Stop Hunting. The more risky option remains a waiting position below 200SMA to activate at the pulse down. Why not waiting for a manual entrance? The level is of cardinal importance and we can not say there will be or will not be a breakthrough. What I'm sure is that the volatility there will be murderous, which in itself excludes the manual entry into good levels.

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