S&P 500: Impulsive trend could weigh on prices
The SPX500 index seems to be forming a wave V of a bullish impulse consisting of cycle sub-waves I-II-III-IV-V.
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In the second half of September last year, the cycle correction wave IV came to an end. It looks like a triple zigzag of the primary degree Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ.
In the near future, the price may continue to move up above the maximum of 4636.46 within the final cycle wave V, which will take the form of a primary degree impulse, as shown on the chart.
At a maximum of 4636.46, we are waiting for the end of the primary impulse ③.
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Alternatively, the actionary wave Ⓩ will tend to be equal with the wave Ⓨ.
Market participants may expect that SPX500 will drop to 3333.84. At that level, sub-waves Ⓩ and Ⓨ will be equal to each other. Only after reaching the specified level, the price may turn around and start an upward movement. For the full completion of the wave Ⓩ, the successful completion of the impulse wave (C) of the intermediate degree is necessary.
An approximate scheme of possible future movement is shown by trend lines on the chart.
Author
Jing Ren
Orbex
Jing-Ren has extensive experience in currency and commodities trading. He began his career in metal sales and trading at Societe Generale in London.
