SPX INDEX, Head-Shoulder- And Ascending-Wedge Completion!

Hello,

Welcome to this analysis about the S&P 500 Index and the 4-hour timeframe perspectives. In recent times the Index pulled back heavily after forming the 4540 and now rebounded to form an initial relief-rally, nevertheless, there is still an increased bearish edge underlying that should not be kept by the side here. On a fundamental basis the real economy is still damaged by the corona crisis and what we have seen in the recent moves to the upside is an overvaluation moving above the normal healthy valuations. This is why these developments are likely to bring the fuel for a correction and acceleration of bearishness. In this case now I discovered all the important levels and upcoming determinations we need to consider.

As when looking at my chart we can watch there that the Index has formed two main formations in the structure, the first formation is still massive ascending-wedge-formation with the coherent wave-count within completed and the breakout to the downside emerged, the second formation which already begun to develop with the forming of the ascending-wedge-formation simultaneously is the head-and-shoulders-formation of which the left shoulder and the head already completed and the right shoulder is now about to finalize with the Index directly moving into this massive resistance-cluster marked in red where several resistances coming together consisting of the 65-EMA, the horizontal resistance, and the lower-boundary-resistance. This is why a pullback from this area is highly likely and should be expected, the Index then has a high possibility to continue with the right-shoulder-development and complete also the H-S-Formation.

Taking all these factors into the consideration now we should expect the head-and-shoulder-formation to finalize within the upcoming times, this will happen when the Index continues bearishly and finally pulls back below the neckline as it is marked in my chart. Such a breakout will be the high potential source of a confirmational-formation that forms below the neckline and which can take the form of a bear-flag or triangle-formation from where the Index follows up and continues bearishly to the downside. The main target-zone, in this case, is within the 4220 Usd level marked in blue from where the situation needs to be elevated anew, when this level does not hold a bearish continuation will emerge below.

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Information provided is only educational and should not be used to take action in the markets.