SPX500 bulls seem to be exhausted after hitting all-time high at 3935 mark early this week. The indice had sharply reversed thereafter dropping through 3884 levels, carving the first lower degree Wave 1. It has been drifting sideways within a triangle structure since then.
Ideally, SPX500 stays below 3935 high and breaks below 3884 mark to proceed towards 3669 support. Please note that 3669 is Wave 4 termination and also fibonacci 0.382 retracement of the entire rally between 3230 and 3935 levels respectively.
The above rally since October 30, 2021 lows seem to have completed 5 waves through 3935 highs, terminating as an impulse. Ideally, an impulse is followed by a 3 wave corrective drop to complete the pattern.
SPX500 might be preparing for a corrective drop towards 3500 levels at least before turning higher again. Alternately, if bears continue to remain in control and push prices below 3380 consistently, it might be a threat to 3200 support.
If the alternate count unfolds accordingly, it could be significant bearish reversal in magnitude going forward. The US Equity markets have enjoyed a religious uptrend since last few decades and this could be the time of a major reversal ahead.
SPX500 remains vulnerable along with the Dow Jones and NASDAQ over the next few trading sessions. As investors and traders begin to believe a new rally has just begun in 2021, we would like to send a warning for potential reversal ahead.
Finacademy Technical Team
Silver has raised through $27.55 levels this morning, alongside most risk assets. The metal has approached a strong resistance zone now and bears might be inclined to take control back soon. Also note that it has almost reached the fibonacci 0.618 retracement of the entire drop between $30.13 and $23.80 levels respectively.
USDJPY bulls are now looking poised to push through 112.00/50 mark, after have carved yet another higher low around 107.50. Please note it bounced off the trend line support since January 2021 lows as well. Looking higher from here for next few weeks.
Gold had raised through $1799 yesterday before reversing sharply towards $1770 before finding support again. The yellow metal is pulling back at the moment and seems to have carved a meaningful top already yesterday. If correct, $1786 might offer strong support.