S&P 500: potential bearish reversal just around the corner?

February 24, 2017 09:51 AM
Elliott Wave Analysis: S&P 500

On the S&P 500, price broke out of a triangle formation nearly three weeks back, which means that index is now in a final leg up within a higher degree Wave 3. As such, an upside can be limited in the near future once we have five sub-waves up within red Wave 5) of 3.

On the updated chart, we can see that price seems to have found a base at the 23.6 Fibonacci ratio, and recent bullish rally may be the final Wave 5, which can see a potential top and a turning point lower around the 2365 area. That said, the divergence on the RSI also suggests a potential bearish reversal could be just around the corner.

S&P 500, 4-hour

About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/