SPX500 might have carved a meaningful top around 4500

Technical Analysis:

SPX500 bears might be back in control after printing 4502 on Wednesday. The indice has dropped through 4470 and high probability remains for a meaningful top in place around the 4500 handle. A break below 4420 will confirm that a top is in place.

SPX500 wave counts since 4035 lows in March suggest a 5 wave rally to be complete around 4502. If correct, the indice would drop below 4350 from here, which is a strong confirmation of a trend reversal in place.

Alternately, if SPX500 bulls are back around 4450/60 zone, which is close to fibonacci 0.382 retracement of the recent upswing between 4350 and 4502, it could imply yet another rally above 4502 to complete the structure.

It would be interesting to see how the indice reacts around 4450/60 mark. Aggressive traders might want to still wait before initiating fresh short positions, and allow a break below 4420. It would eliminate the possibility of a potential lower degree wave iv termination.

Having said that, a continued drop towards 4350 and 4235 would confirm that the trend has reversed lower and bears are back in control. Please note that this could be a major trend reversal, at a higher degree.

Prepared by

Finacademy Technical Team