SPX500 seems to have carved a lower high around 3388 levels, just shy by a few points from 3400 resistance. The indice is set to be back in control of bears but prices need to stay below 3400 mark, going forward. Short term support is seen around 3326 levels and a break lower would confirm a top is in place.
SPX500 wave structure seems to be a classic 5-3 Elliott Wave pattern. The drop between 3400 and sub 2200 was in 5 waves, making an impulse which is labelled as Wave (1). This was followed by a counter trend rally towards 3388 levels, which is corrective (3 waves).
If the above structure holds well, SPX500 should stay below 3400 mark and swiftly reverse lower towards fresh lows in the coming weeks and months. The drop could be marked as Wave (3) at the same degree and is expected to drop below 2200 handle.
The indice has rallied past the last fibonacci retracement but the bearish structure would still remain valid until SPX500 remains below 3400 resistance. Also note that Wave (2) can travel mush deeper towards the origin of Wave (1), but should not cross the extreme.
A break below 3200 would be the first sign of a potential bearish reversal ahead. Also note that price would enter the sell zone of its counter trend line support. It would be considered a safe strategy to sell on rallies thereafter.
SPX500 remains a great candidate to be sold on intraday rallies with target potential towards 2750 and lower, going forward.
Short against 3400, targeting below 2200.