SPX500 Technical Analysis, September 11, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts

SPX500:


Technical Outlook:

SPX500 bears have finally managed to carve a meaningful top around 3600 handle last Thursday. The indice had reversed sharply through 3300 levels before pulling back higher again. It is quite possible that the indice is carving a lower degree corrective wave for now.

SPX500 had raised through 3420 mark yesterday before reversing lower again. The lower degree wave counts are suggesting that Wave 1 is in place around 3300 levels. The corrective Wave 2 might be in progress and it could terminate through 3480 mark.

Also note that fibonacci 0.618 retracement of the drop between 3588 and 3300 is also seen through 3490 levels. Probability for a bearish reversal remains high if prices manage to reach there. Also note that back side of the support trend line is also passing through, which will act as resistance.

SPX500 had earlier dropped through 2200 mark in March 2020. It was a larger degree potential Wave ((4)) termination, which was followed by an impulse wave higher towards 3588 levels respectively. If the above is correct, we should witness a sharp bearish reversal ahead.

SPX500 could produce a larger degree bearish reversal from close to 3480/90 levels, which could extend lower towards 2200 as the initial target in the next several weeks. Looking into the lower degree waves again, the indice seems to be into its last leg rally towards 3480/90 mark.

SPX500 remains a good candidate to be sold on rallies from here. Bottom line remains that prices should stay below the 3600 mark, going forward. Watch out for resistance around 3480/90 levels, that is potential Wave 2 termination point.


Trading Strategy:

Short against 3600, target is open.

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