SPX500 Technical Analysis, July 3, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


SPX500:


Technical Outlook:

SPX500 might be looking ready to take the next plunge lower towards 2200 in the next few weeks’ time. Bears are looking poised to be back in control as the indice hits 3165 highs yesterday. This counter trend rally was expected and we are not surprised it unfolded.

SPX500 probable wave counts are: The drop from 3400 through 2200 was an impulse, 5 waves, Wave (1) of a larger degree on the chart. As the guideline suggests, a 5 wave drop is usually followed by a 3 wave rally. The indice had rallied from 2200 through 3230, in 3 waves, A-B-C, Wave (2) on the chart.

This meaningful high carved on June 09, 2020 has held until now and ideally should hold going further as well. The 3230 resistance is marked as potential Wave (2) termination. If the above larger degree counts hold well, SPX500 is clearly heading lower towards 2200 and further.

Going further, the drop between 3230 and 2960/70 was also an impulse, 5 waves, Wave 1 of a lesser degree on charts. The fractal nature of markets make it predictable since the patterns are repeating themselves at all degrees. The subsequent rally from 2960/70 is now looking complete, in 3 waves, flat corrective structure, Wave 2 on the chart.

It has also reached the fibonacci 0.618 retracement of Wave 1, which is seen around 3137 levels. If the above counts hold well, SPX500 is most likely heading for a sharp reversal towards 2200 in the next several weeks to come.

SPX500 remains a classic candidate to be sold on rallies for now, resistance remains intact at 3230 and 3400 levels respectively.


Trading Strategy:

Short against 3400, targeting below 2200.


Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the in-formation published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

Legal Disclaimer: This article is not investment advice. The data provided is for marketing material purposes and is not intended to confuse nor guide our clients on trading decisions. Any investment activity performed is perceived to be a self-directed decision. Exclusive Markets is not liable for losses that may occur because of a decision made after reading the information published on our research page or any other media.

Risk Warning: Trading the capital markets is risky therefore further knowledge and experience may be required. Apply appropriate risk and money management always and ensure the implementation of safe leverage.

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