SP500 – Daily Analysis

CANDLES

The S&P 500 pushed higher today, but the strength appears limited to very short-term frames like the daily and 2-day charts. When it comes to the larger frames, the bulls tend to retreat. Tomorrow will be critical — the index needs to close above $5695.31, a move of about 2.85% in one day, to form a bottom on the 5-day frame (as shown in the second chart above). While such a rally is possible, the probability is not particularly high.

Meanwhile, the monthly frame is edging closer to recording a MACD bearish cross and closing with a bearish continuation candle.

While the short-term outlook remains bullish and further upside is possible, gains are likely to be capped by strong resistance levels already identified. The mid- and long-term outlooks continue to grow increasingly bearish.

S&P 500

After today’s move, the index has reached the minimum target and is now technically ready for a reversal, following either the red or purple path.

At the micro level, the structure is becoming more interesting. The current wave has possibly evolved into an ending diagonal, supported by certain technical signals. It’s important to note that the marked wave iii is not the longest in the sequence, meaning potential wave v must terminate below $5666.13. If $5666.13 is touched or exceeded, it would invalidate the current diagonal count and could open the door for one more higher high.

SUMMARY

SPX and all major indices continue to maintain a bearish stance on the weekly, 10-day, and larger time frames. While the shorter frames show moderate bullishness, their latest candle formations are far from convincing and could turn strongly bearish with proper confirmation. The next mid-term test at the 5-day frame comes tomorrow. A failure to close above the identified level will keep the odds bearish and further reinforce the bearish stance on the mid-term frame — not an ideal setup heading into the final trading day of April.

From an Elliott Wave perspective, the current structure is likely forming a zigzag, with wave (c) developing as an ending diagonal. If this hypothesis plays out, be prepared for a sharp bearish move in the coming days. Key levels discussed earlier will be critical to monitor.

The index may also be entering a mid-term consolidation phase, with sideways movement potentially lasting several weeks or even months, consistent with the purple scenario. The upcoming monthly closure will be crucial in defining the next major path.

Happy Trading!