FX.co ★ dlehner | S&P 500 Spotlight: Unraveling Market Trends with #SP500

S&P500 Index (SPX) / #SP500

Greetings, colleagues! The picture here, to be honest, looks pretty tense for longers, but at the same time juicy for those who are waiting for a good entry point. Let’s sort out this mess. What’s happening on the charts? We’ve had a hard, nonstop dump over the last couple of days. The index flew down from the highs around 7580 to 7465. Four-hour chart (H4) Wave analysis: By Elliott, the story here looks very similar. We had a large upward wave (likely Wave 3 or A), which topped out above 7580. Now we’re seeing a full-fledged, deep corrective Wave 4 (or B). And the drop is going in a strong impulse. Usually the fourth wave likes to correct the market down to the level of the fourth subwave of the previous smaller degree. And that level sits right around 7430 - 7450. So the downside targets are almost reached, but the pie isn’t fully baked yet. Indicators: The Alligator has opened its jaws downward, the trend is pressing. But look in the basement! RSI(14) has fallen to 30.20. That’s heavy oversold territory for a four-hour index. Usually from here they give at least a strong technical bounce. MACD has gone negative, but the histogram is slowly starting to fade. Hourly chart (H1)

On H1 we’ve got a classic dump – price is just sliding along the lower Bollinger Band, they don’t even let it touch the middle line. RSI on the hourly has gone below thirty (29.88). Sellers are pressing at full power, volumes on the drop (vertical bars at the bottom) are elevated – meaning the crowd is being shaken out of positions hard before the weekend. Where will the price go and what will affect it? As I said yesterday, today there’s a crypto hearing in Congress, but for the S&P 500 the overall backdrop is more important right now. Earnings season in the US has started, plus large funds are taking profits before the weekend against the background of geopolitical noise. For a couple of days (Friday close - weekend): The index will stall over the weekend, but today at the close of the US session it’s going to be hot. I think they’ll push the price a bit lower. The local target where the market maker is dragging the price is the round zone 7430 - 7445. There they’ll take out the last stops of those who bought in early July. After that the panic will subside, and the index will close the week somewhere around 7450. Forecast for the week: Since RSI on H4 is already screaming oversold, nobody will keep dumping the index forever without a bounce – the bears’ nerves will snap. Starting next week (Monday–Tuesday), after a final push down, I expect a strong buyback. We’ll start drawing Wave 5 upward. The first bounce target is a return to the 7510 - 7530 level (retest of the broken middle Bollinger Band). Bottom line You don’t joke around with the S&P, it’s already too late to short (RSI is at the bottom), and going long right now hurts. Ideal plan: We wait for a local spike into the 7435 - 7445 zone today near the market close or at the start of the week. If from there the price starts getting sharply bought back with candle wicks (leaving long tails below), that’ll be a green light for buying. And as soon as the S&P turns up for this bounce, Solana (SOLUSD) will rocket upward to finish those very targets we talked about. In short, the sidelines are a trader’s best friend for a couple of hours, we wait for the final flush and then scoop it up! What do you think, will they drag it down to 7430?