September 17, 2021
SPX500 had dropped to 4432 early this week before bouncing back to 4480-90. The pullback is corrective until now and probability remains for a turn lower toward 4350. The indice needs to stay below 4525-30 to keep bears in control.
Looking at the wave structure since May 2021 lows at 4035, SPX500 has carved an impulse wave through 4551. If correct, the indice should remain poised to break below 4350 initial support in the near term.
Also note that 4350 is lower degree wave iv termination and a break thee would confirm a meaningful top in place around 4551. Any pullback rallies thereafter will be corrective and an opportunity to initiate fresh short positions.
Alternatively, SPX500 might have found support around 4432 mark, which is also the fibonacci 0.618 retracement of lower degree wave v. If the alternate unfolds accordingly, the indice would stay above 4035 and push through 4551 going forward.
A break above 4525 will confirm that SPX500 has some more room left above 4551 before terminating Wave 5. Traders might remain flat until a clear price action presents itself on either side. Watch out the trend line support passing close to 4035 at the time of writing.
Finacademy Technical Team
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