SPX500 futures continue to defy resistance as the indice prints a new high yet again at 4426 yesterday. We have presented the last Wave 5 rally since May 13, 2021 lows registered at 4035 mark. Believe it or not, upside remains limited for the indice to be bought here.
SPX500 wave counts since 4035 lows are presenting a clear 5 wave rally labelled as lower degree waves I through v on the 4H chart presented here. It is quite possible that the last wave is still unfolding and it might test 4450/60 levels before terminating.
It should be noted that SPX500 has been producing bearish divergences on the RSI on multiple timeframes with each high registered. Also note that simple fibonacci extension of Wave i, has reached its 1.618 target around 4422 levels.
If the above are taken into consideration, SPX500 is certainly close to a potential top soon and is not a candidate to be bought. The critical levels to watch now are 4450/60 on the top side and 4385 to be taken out first. The latter would confirm the first sign of a major bearish reversal ahead.
Furthermore, a break below 4235, which is Wave iv termination would confirm that SPX500 has topped out and bears are back in control.
Prepared by
The Profinacademy.com Team
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