SPX500 Could Resume Lower Towards 2700 At least

30 July 2020

SPX500 might be prepared to turn lower towards 2700 levels anytime soon, since the indice has re-traced its recent drop. The indice had rallied past 3250 mark yesterday and probably hit resistance. Bears should remain inclined to take control from here.

SPX500 probable wave counts are as follows: The indice had dropped from 3400 through sub 2200 sub-dividing into 5 waves, making an impulse. This has been labelled as larger degree Wave (1) on the chart here.

The subsequent rally towards 3280 has been in 3 waves until now, and hence corrective in nature. The above is an ideal Elliott Wave Pattern 5-3, marked as Wave (1) and (2) respectively around 2200 and 3280 levels.

If the above larger degree wave structure holds well, SPX500 might resume lower from here with prices staying below 3280 ideally. In a broader sense, the 3400 mark remains bottom line for bears to stay in control.

Also note that the counter trend rally had reached just above the fibonacci 0.88 retracement levels, before reversing lower again. Going further, yesterdays’ rally could be seen as corrective and might have found strong resistance.

Traders might be inclined to hold short positions with a protective stop above 3400 levels. The projected targets remain below 2700 over the short term. Only a break above 3400 mark would change the above bearish structure.

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