SPX500 might have carved a potential top around 3238 (Spot), just above the June highs at 3233 levels. It is soon approaching a major resistance around 3250/55 levels and is expected to reverse lower if prices manage to reach there.
The downside potential remains huge for now, while risk on the higher side is at 3400 levels. A break below 3130 initial support would confirm that a top is certainly in place. Furthermore, also note that fibonacci 0.88 is passing through 3251 levels, strong resistance zone.
A high probability bearish reversal could be expected if prices manage to reach 3250/60 zone. For the above structure to hold, SPX500 should stay below the 3400 resistance, going forward. It seems to be just a matter of time before a huge bearish reversal is underway.
SPX500 potential wave counts are also suggesting the same. The earlier drop from 3400 through 2200 was in 5 waves (Impulse wave), labelled as Wave (1) on the chart here. An impulse wave is usually followed by a correction (3 waves)
The rally between 2200 through 3230/38 has unfolded as a counter trend, hence corrective. The potential corrective zigzag might have already terminated around 3238, or is close to terminating around 3250 zone. Either way, SPX500 is about to resume lower soon.
The indice continues to remain a sell on rallies candidate until prices stay below 3400 mark, going forward. Look lower from here.
Short against 3400, targeting below 2200.
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