SPX500 Resistance Seen Around 3480/90 Zone

17 September 2020

SPX500 might be pulling back towards 3480/90 levels before resuming lower. The indice had earlier reversed sharply from 3588 through 3300 levels. After breaking below 3350, bears confirmed that they are in control and here to stay for long.

SPX500 probable wave counts are as follows: The indie had dropped through sub 2200 levels in March 2020. The might be a larger degree Wave ((4)) termination point as highlighted on the chart. Further to it, the indice managed to produce a religious rally through 3588 highs early this month.

SPX500 might have terminated a larger degree Wave ((5)) at 3588 mark. If the above proposed structure holds well, the indice has carved a meaningful top and should be preparing to reverse at a similar degree. The initial target for the drop could be around 2200 levels.

Looking at the lower degree wave structure, the drop from 3588 through 3300 seems to be the first lower degree impulse wave. SPX500 might be underway to produce a meaningful corrective rally towards 3480/90 levels.

Also note that fibonacci 0.618 of lower degree Wave 1 is seen through 3489 levels. Hence, bears might be poised to take control if prices manage to reach there. The indice might be considered an ideal candidate to be sold on rallies.

Traders might be preparing to initiate short positions around 3470/90 zone with a protective stop above 3588 and projected targets below 2500 at least. Only a break above 3588 would nullify the above bearish structure.

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