SP500 – Daily Analysis
In today’s report, we review the candle picture, examine the next technical targets, and run statistics on recent events. The focus is not on headlines, but on the statistical and technical backdrop behind the move, and whether the rally remains as healthy as it looks on the surface.
CANDLES
Today, nothing was decided. Among the major indices, Russell was the only one to signal a continued decline. Its second close below the 20 EMA cannot be ignored, and RUT remains bearish short term until reversed.
SPX and Nasdaq both held above their 8 EMA support, keeping sizeable bullish odds on the table. Dow also formed a potentially rally-setting candle, although it still requires confirmation.
Tomorrow will be crucial for tipping the scale for ES futures. The 2D Bearish Engulfing needs to be reversed, and that will not be easy. Ideally, the index should close at a new ATH. If it fails, the 2D odds will remain with bears. Moreover, if futures close near Monday’s level or finish negative, they will form a 3D Bearish Engulfing, which we would treat as a clear escalation of bearish momentum.
For now, we are still discussing potential short-term moves. Bearish momentum has not expanded decisively, and further downside is not guaranteed. We should also remember that SPX formed a 50/100 DMA golden cross last Thursday, while the long-term odds remain strongly bullish.
Overall, SPX, Nasdaq, and Dow are neutral short term, pending resolution.
Elliott Waves
Last Wave
Based on Elliott Wave dynamics, the red path currently has slightly better probability. However, if ES fails to move above Monday’s high overnight, tomorrow could bring wave 3 of iii in blue.
The recent advance shows more corrective qualities, and at this point, the chances of lower lows remain higher.
SUMMARY
The broader market remains unresolved in the short term. SPX, Nasdaq, and Dow have not confirmed a larger bearish turn, but the latest Elliott Wave and candle dynamics leave the odds tilted toward further weakness unless bulls deliver a strong reversal very soon.
Russell is the clearest warning sign, already bearish short term and continuing to act as a potential harbinger. At the same time, the larger SPX backdrop remains strongly bullish, supported by last week’s 50/100 DMA golden cross. The current risk is tactical rather than fully structural, but tomorrow’s action could decide whether the pullback deepens or the rally regains control.
