SPX500 Technical Analysis, October 2, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

SPX500 might be carving a potential corrective wave towards 3450 or it has completed around 3397 levels respectively. The indice is seen to be trading around 3380 (Thursday Close) and bears might be looking poised to push lower towards 3200, 2900 and beyond.

SPX500 long term wave structure might be suggesting that the indice has terminated a larger degree Wave ((5)) just below the 3600 handle in September. The drop from sub 3600 through 3200 has been sharp and could be lower degree Wave 1/A.

If the above structure holds well, SPX500 might be carving Wave 2/B at the moment that might terminate around 3450 levels before reversing lower again as Wave 3/C resumes. For the above proposed wave structure to remain intact, prices need to hold below 3600 mark.

SPX500 had earlier dropped through 2200 mark terminating larger degree Wave ((4)). Thereafter, the indice had managed to produce an impulse rally through sub 3600 levels, larger degree Wave ((5)). If the above structure holds, we are set for a decline towards 2200 in the next few weeks.

Alternately, SPX500 could be preparing to drop through 3000 levels at least, before finding support to turn higher again. Either ways, bears are positioned to remain in control from here at least for the next few weeks. We would consider reviewing again around 3000 mark.

In the next few days, watch out for a bearish reversal from close to 3400/50 levels. The indice remains a good candidate to be sold on rallies until prices stay below 3600 mark.

Trading Strategy:

Short against 3600, target remains open.

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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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