SPX500 has dropped lower towards 4350 mark, which is potential support for the short term. The indice had earlier rallied through 4400-10 levels as expected, and could be retracing lower for now. Critical price support is around 4280 and prices need to hold to keep its counter trend bullish structure intact.
SPX500 seems to have carved an impulse wave between 4551 and 4300 mark respectively. It is labelled as primary Wave 1 on the 4H chart here. The subsequent rally towards 4485 was corrective in nature and could be potential Wave 2 termination.
If the above structure is correct, SPX500 has been progressing within primary Wave 3 since September 27, after hitting lower high around 4485 mark. In that case, prices will stay below 4485 and continue drifting lower towards 4150 and 4000, as Wave 3 progresses.
Alternatively, SPX500 might be unfolding its corrective Wave 2 counter trend rally as an expanded flat. If the alternate counts unfolds accordingly, SPX500 might reach up to 4500 mark to complete the structure and terminate Wave 2 as labelled on the chart here.
Traders might want to sell on rallies through 4450-4500 zone, with risk above 4451 and potential target towards 4150 and 4000 respectively.
Prepared by
The Profinacademy.com Team
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