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 appears on the surface.
CANDLES
Today, all major indices rallied in an attempt to quickly reverse the 3D bearish candles that were completed yesterday. On the surface, the session looked very bullish, and all daily signals were constructive. There is indeed a chance that the 3D bearish momentum will be reversed on Friday. However, the main message today came from the Elliott Wave department.
Overall, the candle outlook for SPX, Nasdaq, and Dow is neutral. The mid- and long-term trends remain bullish. Friday will likely be the decision maker for the mid-term outlook.
Elliott Waves
Last Wave
Yesterday, I discussed the importance of the next wave upward and its character. The sharp moves in both directions caused meaningful structural damage, and the wave now looks corrective. Even if we see a higher high tomorrow, the move is unlikely to morph into a clean impulse, although the diagonal option remains on the back burner.
Similar to Nasdaq, SPX now has two most probable paths. The first is a relatively quick ABC correction in green. If, however, the index falls through the green rectangle, the odds of a stronger and longer correction would increase dramatically, especially if that move coincides with a daily Bearish Engulfing or a similar bearish candle signal.
SUMMARY
SPX remains at a short-term decision point. Today’s rally helped the daily picture, but it did not repair the broader 3D bearish setup, and the Elliott Wave structure now looks more corrective than impulsive.
The main question is whether SPX can complete a quick ABC correction and resume the larger bullish trend, or whether a break below the key target area triggers a deeper and longer pullback. Nasdaq and Dow are broadly aligned with this same roadmap, making Friday especially important for the mid-term direction.
Live Trade
Our Live Trade System flipped Short before today’s close, adding an important confirmation layer to the caution already visible in candles and Elliott Wave structure.
This does not automatically confirm a major reversal, but it does strengthen the short-term bearish case and makes Friday’s session even more important. If SPX, Nasdaq, and Dow fail to repair the current structures quickly, the market could transition from a tactical pullback into a broader corrective phase.
