SPX500 might be ready to reverse lower in a dramatic fashion until prices stay below 3400 resistance (not seen on the chart here). The indice has been successful in carving an intermediary resistance around 3230 levels as bears prepare to resume lower again.
Let us have a look at the larger degree counts first. SPX500 had dropped from 3400 towards 2200 levels sub-dividing into 5 waves, which could be seen as a higher degree Wave (1) (not seen on the presented view). The subsequent rally between 2200 and 3230 has been a corrective zigzag labelled as A-B-C, also larger degree Wave (2) on the chart.
If the above larger degree wave counts are correct by any means, SPX500 should ideally remain below 3230 resistance and proceed towards 2200 levels at least. The fibonacci extensions of the larger wave are pointing towards 1750 levels.
Looking at the lower degree wave counts since 3230 highs, the drop to 2965 has sub divided into 5 waves, labelled as Wave 1 here. The recent since then has managed to reach 3155, just above the fibonacci 0.618 retracement of Wave 1. We have labelled this as potential Wave 2 termination, but kept room for another test of 3160 levels, before Wave 2 completes.
Either way, SPX500 along with other global indices is looking poised for a religious resumption of the sown trend any time soon. Watch out for a bearish reversal from current price action 3120 or from 3150/60, going forward.
Technical Analysis Team
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