SP500 – Daily Analysis
In today’s technical analysis, we look past the headlines and examine the latest S&P 500 candles, momentum signals, market structure, and key technical levels to assess the likely direction and potential targets.
CANDLES
After yesterday’s 2D, 5D, and 10D closures with bearish signals, today brought a bullish counterattack. Both the cash index and futures backtested the freshly formed 8/20 EMA bearish cross. The bottom has not been formed yet, but the chances of forming it tomorrow are fairly high. The index needs to close above today’s high and, ideally, above the 8 EMA.
At the same time, the cash index formed a 2D candle that is somewhat concerning, as it marked a second close below the 8 EMA support. This means bears were not fully defeated after today’s move. Short-term momentum remains neutral-bearish.
Tomorrow is a crucial day, with both the weekly and 8D frames closing. So far, the 8D frame looks bearish, while the weekly frame needs confirmation after last week’s Bearish Engulfing. A strong rally could mitigate the current bearish odds.
Overall, the short-term outlook for SPX is neutral, while the mid-term outlook remains bearish, though this could change tomorrow.
Elliott Waves
Last Wave
Today, SPX cash formed a wave that can be viewed as wave c of B in red. I still keep the red count on the table because wave A breaks nicely as an impulse, and downside impulses are rarely alone — they are typically followed by another wave in the same direction.
However, today’s move could also be wave 3 of a larger impulse upward — the green count. The open question with that impulse is that futures are not aligned with the cash structure. ES made a new lower low, while SPX did not. This type of misalignment is quite rare near major turns. In the ES case, today’s wave off the bottom would be wave 1. We shall see how this puzzle resolves tomorrow, together with the candles and confirmations.
The mid-term outlook could change tomorrow. The daily Bullish Engulfing may put a hard stop on this drawdown. While such a short wave (2) is possible, most typical pullbacks retrace 0.5–0.618 of wave (1). If this reversal is confirmed, we should be looking for wave (3) in June–July, potentially adding 600–800 points, or even more, to the index.
SUMMARY
SPX is at a critical short-term decision point. Today’s bullish counterattack and daily Bullish Engulfing improved the odds of a potential bottom, but the reversal still needs confirmation.
The structure is not fully resolved. The green path could open the door to a larger rally into June–July, while the red path still allows another leg lower because the earlier decline developed as an impulse.
Tomorrow is the key test. The weekly and 8D closures should help decide whether today’s move was the start of a real bullish reversal or only a temporary bounce within a still-bearish structure.
Overall, the short-term outlook is neutral, while the mid-term outlook remains bearish for now, but could change with strong confirmation tomorrow.
