SPX500 faces resistance around 4400-20 mark

Written by Finacademy.io

October 8, 2021

Technical Analysis:

SPX500 has rallied through 4400-20 potential resistance zone as the counter trend rally gathered pace. The indice is either carving a lower degree wave ii within primary wave 3, or is still carving primary wave 2 as an expended flat.

If wave ii of 3 is unfolding, SPX500 might prepare to turn lower from here and drag towards 4150 at least as iii of 3 begins to unfold. Also note that prices have reached the fibonacci 0.618 retracement of the drop between 4485 and 4270 levels.

SPX500 needs to stay below 4485 mark for the above count to remain valid. High probability remains for a drop towards 4150 and 4000 mark going forward. Traders might be preparing to initiate fresh short positions here.

Alternatively, if an expanded flat is unfolding as potential wave 2 termination, SPX500 might test at least 4485 levels before reversing lower again. Also note that prices could push higher towards 4500-10 levels before termination wave 2.

Either way, SPX500 might be preparing to reverse lower towards 4150 and 4000 against 4551 high. Traders might want to position themselves accordingly on the short side with potential target below 4000 mark.

Prepared by

Finacademy Technical Team

Related Articles

Gold finds support ahead of $1758 mark

Gold finds support ahead of $1758 mark

Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.

US dollar index carves a potential top at 96.88

US dollar index carves a potential top at 96.88

The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.

en_US