The SPX500 dropped through the 3,820 low on Tuesday as most risky assets resumed their corrective declines against the US dollar. The price action was in line with projections of a potential decline and it could drag the price through 3,750 before finding support again. Bulls will be inclined to hold prices above 3,636 keeping the near-term structure constructive.
The SPX500 has completed a three-wave larger degree decline between 4,818 and 3,636 as seen on the daily chart. Ideally, prices should retrace the entire drop towards 4,100 at least before bears are back in control. Please note that the above drop could be the beginning of a much deeper correction in the coming months.
The SPX500 has also carved its recent lower-degree upswing between 3,636 and 3,945 which is being retraced for now. Prices have reached the 3,820 mark and they could further continue towards 3,750, which is the Fibonacci 0.618 retracement of the recent upswing as projected on the chart. Bulls will be poised to resume higher thereafter and push through 4,100 levels at least.
Trading plan:Potential rally through 4,100 against 3,600
Good luck!