SPX is testing a solid upside resistance 4200. A confirmed break above this resistance could lead to a substantial upside extension, but we may also expect a new swing down for now as the SPX is ranging between 3800 and 4250 for almost six months now.
Only a confirmed break above 4200 will lead to an extension higher and a continuation higher to test the 4250 critical level for this year.
Any short-term confirmed break below 4150 would lead to a bearish swing lower to 3950 again, for which we give a little more weight than an upside break above 4250.
This could be a medium-term low-risk short trade, but we reserve the right to switch to a long trade in case of a break above 4250. Price action positioning and a near-strong resistance with a rising wedge formation (usually bearish) give a short trade a greater probability.
You can take the short trade here with the stop loss just above 4250 as we see a higher probability of a swing reversal lower. By placing this trade your RR ratio is above 2. If you are stopped, you can reverse your trade to a long trade, especially in the case of a confirmed break above 4250.
