A sharp fall to 1783 on Friday suggests that the S&P 500 (CME:SPH14) is heading lower now in wave 4. Wave 4 is a corrective leg, so this can be only a temporary weakness but we still need three legs down, (a)-(b)-(c), before we turn bullish again. Ideally a three-wave pattern will find support around the1740/55 area.
S&P500 Daily Elliott Wave Analysis
S&P 500 4-hour
The S&P500 fell sharply to the downside in the last three trading days, which appears to be an impulse in progress, based on the personality of the move. As such, we now have labeled end of a wave (v) of 3 at 1846 with truncated subwave v) from where we are now tracking a five-wave move down in wave (a), first leg of a larger contra-trend three wave move. At the moment, we see prices in minor pullback, labeled as wave iv, so be aware of more weakness early this week.
S&P 500 4-hour Elliott Wave Analysis
S&P 500 1-hour
On the intraday chart of the S&P futures, we see an impulsive decline in action because of the strong and big move on Friday, which is characteristics of an impulse. As such, the current bounce from the the lows is most likely only wave iv that may stop around 1790/95. Any intraday shorts from that region should have stops at 1813 invalidation level.
S&P 500 1-hour Elliott Wave Analysis