SP500 – Daily Analysis
The S&P 500 did not like the Fed’s message.
No rate change was expected, but the nuance mattered. The Fed acknowledged a supply- and energy-driven inflation shock, yet did not frame it as something markets can simply look through. The message was clear: the economy remains resilient, inflation is still too high, cuts are off the table for now, and hikes are back in the conversation.
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 most probable direction and potential targets. The focus is on whether today’s weakness damaged the bullish roadmap — or simply reset the short-term structure before the next move.
CANDLES
The Fed’s message turned the tables entirely. All major indices reacted today with strong bearish candles and bearish combinations. QQQ and IWM lost 8 EMA support. SPY lost both the 8 and 20 EMA support levels. DIA is still holding, but its candle suggests at least one more bearish day.
SPX technically confirmed a reversal on the daily frame and, if the situation does not improve, could record an 8/20 EMA bearish cross as early as tomorrow. A major bullish failure came from the 5D frame, which also closed today. That frame had formed a bearish Tower Top, then attempted to negate it with a Bullish Engulfing — but failed. That failure may prove costly in the short to mid term.
Overall, SPX and all major indices are now bearish short-term, with higher odds of building bearish momentum over the next 1–2 days. The weekly close will be key.
Elliott Waves
Last Wave
SPX moved very aggressively for wave iv and broke the channel. A little lower — below the red line — and it will invalidate the potential impulse in green. In that case, the red count will become primary.
However, if the current wave falls below the red target rectangle, we may need to prepare for much worse consequences. We remember that the very first wave down, marked as A, was possibly an impulse. Another impulse down, stretched 1.414x of wave A or longer, could signal a potential impulse of a higher degree, where wave A becomes wave 1 and the current wave becomes wave 3.
Let’s see how the wave develops tomorrow.
SUMMARY
SPX shifted sharply bearish after the Fed’s message, with the index confirming a daily reversal and all major indices reacting with strong bearish candles. SPY lost both the 8 and 20 EMA supports, while QQQ and IWM also lost 8 EMA support. If conditions do not improve quickly, SPX could record an 8/20 EMA bearish cross, adding further pressure to the short-term structure.
The 5D frame also delivered an important bullish failure. A prior bearish Tower Top was not successfully negated by the attempted Bullish Engulfing, and that failure may carry short- to mid-term consequences. The weekly close is now critical for determining whether this remains a short-term shakeout or develops into something larger.
From an Elliott Wave perspective, SPX moved too aggressively for a clean wave iv and broke the channel. A little lower, below the red line, would invalidate the potential green impulse and make the red count primary. If the current decline falls below the red target area, the risk would escalate materially, as the move could begin to resemble wave 3 of a larger-degree impulse rather than a simple correction.
