SPX500 remains bearish against 4551

Technical Analysis:

SPX500 might have carved a corrective Wave 2 around 4484 and could be unfolding Wave 3 lower towards 4150 and 4000 levels going forward. If the above count is correct, the indice would stay below 4485 and continue lower after a corrective pullback.

Alternatively, SPX500 is still carving potential Wave 2 correction as an expanded flat a-b-c as highlighted on the chart here. If the structure unfolds accordingly, bulls would remain inclined to produce a rally towards 4500 mark in the next few trading sessions.

Either way, SPX500 remains a sell on rallies case until prices stay below 4451 high. The indice had rallied through 4451 from 4035 lows, subdividing into five waves. Further the termination point round 4451 is most likely at multiple degrees.

Also note that subsequent drop from 4451 high through 4300 mark was in five waves, marked as primary Wave 1 here. Ideally, a Wave 2 is complete around 4484 or would be complete after the proposed alternate count unfolds as an expanded flat.

SPX500 might produce a sharp rally towards 4500 from current levels, to terminate as potential Wave 2 expanded flat structure. Once complete, the indice could turn lower towards 4150 and 4000 levels as Wave 3 progresses.

Prepared by

Finacademy Technical Team