S&P continues to extend higher and higher breaking to new all time highs and beating all bearish expectations and fears relative to the debt ceiling and the Government default fears. The rise from 1646 has been sharp and we believe it has been extended as far as it can get and a correction should come soon. Bulls have more to lose in these levels than bears and although trend remains up with higher highs and higher lows and most time frames, the extent of the rise and our wave count show signals of wave completion.
The above wave count is my preferred one and unless we see more upside extension we do not believe there more upside potential and that the market should pull back towards 1720-1700 in a corrective pattern.
Prices have moved upwards in an impulsive pattern and therefore should break below the start of this wave which is the low at 1646. For the upside momentum to continue, prices will need to make a corrective pull back targeting the area of wave 4 or maximum the 61,8% Fibonacci retracement which is at 1679. For now we are neutral and waiting for the market to provide more data over the coming sessions. The last quarter of the year is going to be very interesting from a traders point of view. For more detailed short and long-term analysis and a view of my trades, become a member today.
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