July 23, 2021
SPX500 has raised through 4383 highs today, up almost 150 points from the lows around 4234 print early this week. The indice might be testing its previous swing highs around 4394.6 levels, before turning lower again. The structure remains bearish until prices stay below 4394.6.
SPX500 had earlier dropped through 4234 lows before bouncing back higher again. We have labelled the recent wave structure as probable Wave 1 and 2 around 4234 and 4383 levels respectively. If the above is correct, SPX500 would stay below 4394.6 and resume lower as Wave 3 unfolds.
Potential downside targets are pointing towards 4135 and 4030 levels at least, before SPX500 finds any support for a pullback. The indice might be unfold Wave 3 lower towards 3700 levels if the above structure holds well.
Alternately, if SPX500 bulls manage to push through 4394.6 highs, it could change the structure for short term. Having said that, upside potential remains very limited and it is just a matter of time before bears are back in control.
Immediate support is seen through 4351 levels and a break below that could be seen as the first sign of a bearish resumption. Most traders might hold short positions with risk above 4400 mark.
Finacademy Technical Team
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