SP500 – Daily Analysis
The S&P 500 scared everyone in the early hours, but then recovered most of its losses. The key question is how this bounce is positioned technically and whether it is ready to develop into a larger rally.
In today’s technical analysis, we look past the headlines and examine the latest candles, momentum signals, market structure, and key target zones to assess the health of the bounce and define what comes next.
CANDLES
I am afraid the candle news is not constructive. The daily frame closed below the 20 EMA resistance for the third day in a row, and the last two candles are likely bearish consolidation rather than a bottom formation.
The most bearish news, however, came from the larger frames. The 5D and 10D candles formed technically supported Bearish Engulfing / Inside Down combinations, significantly strengthening the mid- and long-term bearish odds. In light of this, bulls may still have one or two more attempts to reverse the odds, but the broader pressure is now on the other side.
Overall, the short-term outlook for SPX is neutral-bearish, while the mid-term outlook is solidly bearish.
The broader market looks similar to SPY. QQQ and IWM are in the same boat, while DIA is also bearish but has not yet lost the 20 EMA. This positions Dow Jones for relatively smaller losses ahead, which aligns with the hypothesis we discussed in one of the previous analyses.
I am curious which index will be the first to record an 8/20 EMA bearish cross. So far, SPX is the closest.
Elliott Waves
Last Wave
Today’s low can be viewed as either the end of wave A in green or wave 1 in blue. These are the two most probable paths. However, some technicals also support the possibility of an even larger impulse in red.
Depending on the size and structure of tomorrow’s bounce, we will determine the most probable path going forward.
Live Trading Room
At the end of the day today, our LT Room increased the position to 100% Long.
SUMMARY
SPX remains under pressure after failing to reclaim the 20 EMA for the third consecutive daily close. The last two daily candles look more like bearish consolidation than a durable bottom formation, while the 5D and 10D frames have now added stronger bearish combinations. This significantly strengthens the mid-term bearish case, even though bulls may still have one or two attempts to reverse the odds.
The broader market confirms the same message. QQQ and IWM are largely in the same boat as SPY, while DIA is also bearish but has not yet lost the 20 EMA. This supports the earlier view that Dow Jones may experience relatively smaller losses, while Nasdaq and Russell remain more exposed.
From an Elliott Wave perspective, today’s low can be viewed as either the end of wave A in green or wave 1 in blue. These remain the two most probable paths, although some technicals still allow for a larger red impulse. The size and structure of the next bounce should help define which path becomes dominant.
Overall, SPX is neutral-bearish short-term and solidly bearish mid-term. The broader market is aligned with this view, but the degree of vulnerability differs by index: Nasdaq and Russell remain more exposed, Dow Jones looks relatively more resilient, and SPX sits in the middle.
