leandrosander_

The SP500 must test or renew lows!

CURRENCYCOM:US500   US 500
Hello everyone, today I'm going to bring here my view on the SP500

The SP500 is again trading at a downtrend line, which shows that we are in a strong sell zone.
This price zone is also confluent with the Fibonacci retracement range between 50% and 61.8% of the last leg down.

Knowing this, I believe that prices will test at least these two support bands that I have plotted on my charts.
If prices manage to stay above 3750p, we have a more positive context that I will update here, but I warn you that this is not my baseline scenario.

And now I'm going to explain to my friends which is, in my view, the most likely context for the SP500

Starting with the 12h chart
Here we clearly have a move that follows an uptrend line, so prices remain bullish , but all breakouts of the previous top fail to develop a new swing high, and this is a warning of a wedge formation.
The corrections are going deep, whereas after the 10/11 the prices haven't moved and we are at the wedge return line, so a zig-zag below that uptrend line should be a great context for a correction .

But you can see that the SP500's 4100p zone is very liquid.
So if prices break the previous week's high, we have to be careful not to buy the dead cat jump, I honestly think this possibility of a test at 4100p is lower.

On my main read we will look for a zig-zag below the wedge after testing the weekly downtrend line.
Look at the 4h chart

What contributes to my correction reading on the SP500 is the DXY , see:
And this proportionally inverse correlation works a lot,
So that's it guys, my reading for the US market is for a new downtrend, after a wedge-shaped pullback, for this reading to change we have to close the current week above 3750p or have a very positive catalyst, I hope it does liked and don't forget to leave your LIKE that encourages me to continue publishing here!

Great trades and big hug.

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