August 17, 2021
SPX500 hit yet another high yesterday around 4482 mark hinting now resistance being faced. Bearish divergences showing on the hourly charts indicate the discrepancies associated with each new high. At the same time, no critical support has been taken out yet to confirm a bearish reversal ahead.
SPX500 immediate support is seen at 4438 mark, followed by 4374 respectively and a break below that would be required to confirm a potential trend reversal ahead. Alternately, a push above 4482 would attempt a break above 4500 levels going forward.
The SPX500 has probably completed 5 wave rally from 4035 lows since May 2021. The indice has exceeded fibonacci 0.618 extension seen around 4456 levels and might be preparing for a bearish turn soon. We can at least expect a corrective drop if not a bearish reversal ahead.
Also note that lower degree wave iv termination is seen around 4235 levels, potential support to keep the uptrend intact. If SPX500 bulls manage to stay above 4235 going forward, the uptrend would remain intact. On the flip side though, a break below 4235 would indicate the beginning of a potential trend reversal.
Traders might be preparing to initiate fresh short positions on a break below 4375 at least. It might be indicative of the first step to a larger correction ahead.
The Profinacademy.com Team
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