SPX500 had dropped to 4305 low on Monday before finding some support and is trading around 4375 at the time of writing. The indice has dropped almost 250 points since September 3, taking out initial support at 4350 as expected and discussed here.
SPX500 has also broken its trend line support since May 2021, entering into the sell zone for the first time in the past five months. Also note that the indice has carved its first impulse drop between 4551 and 4305 levels, marked as Wave 1 on the 4H chart here.
If the above count is correct, the indice is expected to produce a corrective rally back towards 4450-60 zone to terminate Wave 2. The fibonacci 0.618 retracement of Wave 1 is also passing through the above resistance zone, a common guideline for Wave 2 to terminate.
SPX500 bears will remain poised to be back in control thereafter (4450-60). If the above unfolds accordingly, the indice could sharply reverse towards 4000 mark as Wave 3 progresses. Ideally, the indice has carved a meaningful top around 4551 on September 03.
Traders will be now poised to initiate fresh short positions around 4450-60 mark, with risk above 4551 and potential target towards 4000 at least.
The Profinacademy.com Team
Bitcoin dropped close to $46000 mark on Monday before finding support again. The crypto is seen to be trading around $46500 mark at the time of writing as bulls remain inclined to be back in control.
The US dollar index spiked through 96.85 mark on Wednesday on the back of the Federal Reserve interest rate decision.
EURUSD is finding support from its consolidation lower range around 1.1260-70 and could resume its rally from here soon.