SPX500 seems to be preparing to reverse big way towards sub 2200 levels. Bottom line, the indice should stay below 3400 mark going forward. Immediate support is seen around 3200 and a break below that would confirm and accelerate lower.
SPX500 wave structure remains unchanged for now. The indice had earlier dropped from 3400 through 2200 levels in 5 waves, making an impulse. It is labelled as a larger degree Wave (1) on the daily chart. Ideally, an impulse drop is followed by a corrective rally.
SPX500 has managed to carve a corrective zigzag from 2200 levels through 3280 levels as seen here. The sub waves are marked as A-B-C while termination at 3280 could be potential Wave (2) of a similar degree.
Also note that the counter trend rally has managed to reach fibonacci 0.88 retracement, which is passing through 3250. High probability for a bearish reversal remains on cards from here. Breaking below 2780 would certainly confirm a meaningful top in place.
If the above proposed counts are correct, SPX500 should reverse sharply lower from here towards sub 2200 levels and further. Please note that the drop would be sharp and swift as Wave (3) of the same degree is setting up to unfold.
The indice seems to have completed a lower degree wave 1 and 2 at 3200 and 3260 respectively. If the above counts are correct, we should witness a sharp reversal lower towards the March 23, 2020 lows going further.
Long against 104.20, targeting above 111.75.