S&P continues to trade below the important 1700 resistance but all downward moves to 1680 are met with buying and bulls manage to push prices above 1688 and establish a support at that level. Currently we see two equally possible Elliott wave counts that are depicted in the chart below. Both wave counts are equally possible despite the fact that we favor the bearish one because of the longer term picture and the high probability that the move from 1560 has finished.
As long as prices trade below the 1700 resistance the bearish scenario will be the favorite one. However the upward move from 1682 gives bulls chances that the correction from 1709 is over and a new upward move is starting. Bulls will need to break above resistance. Bears will need to break below 1690 and confirm that a downward trend is starting if prices break below 1682. Our first target for bears is 1665 and for bulls 1725.
Another sign that supports our favorite bearish scenario is Dollar strength and weakness in Gold. Gold got rejected once more at the recent high at 1340-50$ and the Dollar Index is showing signs of trend reversal. EURUSD is down impulsively and USDJPY is moving upwards in an impulsive pattern.
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As always, thank you for taking the time to catch up on my thinking.