SPX500 (futures) had rallied through 4261 highs yesterday, falling short of just 5 points from registering all-time highs yet again. The recent lower high might be Wave 2 as labelled on the 4H chart here. Bottom line remains 4266.7, which needs to stay intact.
SPX500 had dropped through 4138 lows over the last week breaking below immediate support at 4165/70 mark. The subsequent rally towards 4261 yesterday looks to be corrective, going much deeper as a typical Wave 2 property.
If the above Waves 1 and 2 structure holds well, SPX500 will remain below 4266.7 highs registered earlier, and turn lower from here as Wave 3 begins to unfold. Potential for Wave 3 remains below 4000 as shown here.
Furthermore, if Wave 3 proves to be an extension, which normally is the case, SPX500 might complete its first larger degree impulse drop below 3700 levels in the next few weeks. A break below 4219 from here, would confirm that Wave 3 is underway.
Most traders might be preparing to initiate fresh short positions around current levels at 4250 levels. The risk reward ratio offered now is up to 1:10.
Finacademy Technical Team
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.