SPX500 faces strong support at 4350

SPX500 futures had dropped below 4450 on Monday before finding support. The indice seems to have carved its first lower degree impulse wave between 4551 and 4447 levels recently. If correct, the indice would stay below 4551 mark, going forward.

SPX500 might pull back towards 4525 levels carving a corrective wave before turning lower again. Please note that the indice needs to break below its trend line and initial support at 4350, before confirming a bearish reversal.

If the above structure unfolds accordingly, it would be confirm that the indice has carved a meaningful top around 4551 and that bears are back in control. Also note that bearish reversal could be sharp and initial target could be seen around 4035, lower degree Wave 4 termination.

Looking at the wave structure, SPX500 futures have carved 5 waves between 4035 and 4551 levels respectively. Also note that the above termination could be at multiple degrees (of Wave 5). Hence bearish reversal could be strong and sharp.

Alternatively, the recent drop could be a part of an expanded flat corrective wave. In that case, SPX500 futures might push above 4551 before finally terminating. Traders might remain on the side lines until price action confirms.

Prepared by

The Profinacademy.com Team