SP500 – Daily Analysis
The S&P 500 and other indices rebounded today—as if they were ready to cap Friday’s massacre and launch a fresh rally like nothing happened. Well… plenty of candles spoke today, and we just need to listen. Let’s translate the Candlespeak into plain English.
CANDLES
Today, the S&P 500 and other majors formed bullish Harami combos. The daily setup is there, but I don’t see the solid technical support that usually accompanies serious reversal intent. In any case, we need a strong bullish follow-through tomorrow if bulls are serious—they must drive the indices to a close above Friday’s high. Anything less will be a failure.
But that’s not all. Zooming out to read momentum, bears have infiltrated the larger frames. The 2D, 3D, and—most importantly—5D frames closed with solid bearish combos, reinforcing Friday’s strong bearish weekly close. On the 5D frames, SPX and Dow made Bearish Engulfings; Nasdaq printed a Dark Cloud Cover, and RUT was nearly there. All came with significant technical support. This is concerning, as these signals almost never appear when the daily is ready to flip.
Short term: SPX — bearish until a bullish signal confirms
Mid term: SPX — bearish
Long term (15D and larger): SPX — bullish
Elliott Waves
Mid Term
At this point, the green count has stronger technical support, though the purple remains on the table. The most statistically probable targets for both counts are shown on the chart.
Correction
As futures opened Sunday with a large gap up, we can’t know its internal structure, which complicates the EW analysis of the current wave. We’ll continue to monitor the two options discussed in the weekly. To meaningfully reduce the bearish odds for the blue count, the index must move above the red horizontal line in an impulsive fashion (wave 3) and, from a candlestick perspective, close above it tomorrow. Let’s see if that’s doable.
SUMMARY
SPX and other indices are far from settled today. A huge bounce after a gap cannot be fully evaluated yet, but we know short- and mid-term momentum has deteriorated, and we also know the criteria the index must meet tomorrow to register a bullish reversal—and they’re quite challenging. At this point, the overall readings lean bearish for the next 3–5 days, and possibly longer.
Short term: SPX — bearish until a bullish signal confirms
Mid term: SPX — bearish
Long term (15D and larger): SPX — bullish
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Happy Trading!
