Traders, the previous chart I showed was the breakout of the bear flag in the SP500 index. It gave us a target at the first major support area of 3230 points. Spot on, to say the least. After that I warned for new resistance around 3320 and that's where we ended up on today's trading session.
So far it seems that the wave 4 correction has been completed and we're back in the race for (final) higher highs in the coming months, but unfortunately we are not out of the woods yet! The first thing I would like to point out is that due to not beating the 3320 resistance, this 3 wave correction can still turn into a 5 wave correction. That would mean my larger wave count for the bulls is incorrect and we will NOT see a new all time high. Secondly, the RSI on the 1 hour chart shows no positive divergence, giving us another hint that we could go lower. I'm not saying this is necessary but it is definitely desired.
My plan for Wednesday and the rest of the week is to wait and see if the bulls can beat that resistance area and then join them in buying the dips. If they fail to do that I will continue to short the index.
Best regards from the Netherlands.
P.S. Click on that follow button for more charts on indices and commodities :-)
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Index turned just below the projected resistance. The bulls might try again in the later segment of Wednesday's session.