SPX Short Opportunity Hinges on These Two Factors

by Justin Bennett  · 

November 22, 2023

by Justin Bennett  · 

November 22, 2023

by Justin Bennett  · 

November 22, 2023

Today I’m going to discuss a must-watch resistance area for SPX and what could trigger a short opportunity in the coming days.

I’ll also share the latest on the US Dollar Index (DXY), a key driver for today’s SPX idea.

Watch the video below and scroll down for the annotated charts and analysis.

The US dollar is enjoying some relief today after reclaiming the 103.50 yearly open, as discussed in the last two videos.

That has some risk assets under pressure, although the SPX (S&P 500) is holding firm, at leats for now.

Whether we get a pullback from the SPX will depend on the 4,560 to 4,580 region.

We saw the market test the all-time high trend line today at 4,560, and there’s an unfilled gap from August at 4,576.

The combination could suggest a pullback is near.

However, there are a couple of key points to keep in mind here.

The first is that the DXY would have to reclaim the recent 104.00 lows, along with levels like 104.40 and 105.06 to put pressure on stocks.

That’s no small task considering how weak the dollar has been in November.

The second point to consider is that the SPX is holding firm above 4,524.

In my opinion, the highest conviction SPX short would materialize on a sustained break below 4,524 on the higher time frames.

Without that, shorts are risky.

For the majority of traders, this is a wait-and-see moment for the SPX.

Buys are unattractive while below resistance, and shorts are risky while above 4,524.

But there’s no shortage of sell-side liquidity for SPX to sweep if the dollar can continue to strengthen and the SPX gets below 4,524.

As always, patience is key.

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