SPX Chart Analysis: A Detailed View on Long-Term and Short-Term Trends
We are analyzing the S&P 500 (SPX), which has followed a strong and steady upward trend for over 70 years. This long-term development is evident in the monthly chart (Image 2), showcasing the wave count over the past decades. The index has completed a clear five-wave impulsive structure and appears to be in the final third of the larger Wave 5. We anticipate this final wave could peak around the 6,100 level.
Short-Term Perspective: Examining the Current Structure of Wave 4
A closer look at the 4-hour chart reveals that we are currently in a corrective phase within Wave 4. This phase, so far, consists of a three-part movement, which is typical for a correction. The recent rally, which began from the “Black Monday 2.0” low, appears to be an overshooting B-wave within this correction. B-waves are notoriously tricky and unpredictable—they can sometimes be very short and at other times extend significantly. In this case, the structure suggests a strong B-wave that might be marking the upper end of this move.
Technical Assessment of the B-Wave and Potential C-Wave
As shown in, the B-wave is approaching key resistance levels. The movement from the A-wave low displays a three-part structure, further validating the corrective nature. Typically, the C-wave is at least equal in length to the A-wave. Since we are already approaching the target zone for this move, the larger C-wave could start at any moment, triggering a downward movement to conclude Wave 4.
A significant resistance level for the B-wave lies around 5,900 points (highlighted by the red line in Image 1), which has already been tested. A break below this area could confirm the onset of the C-wave, with a potential target near the lower end of the correction at approximately 5,100 points.
Political Influences and Speculative Considerations
An additional factor that might impact the market is the upcoming U.S. election. From a speculative standpoint, this major political event could increase volatility in the coming weeks and potentially act as the catalyst for the C-wave to begin. Political uncertainties often trigger short-term market corrections. While the long-term structure of the SPX is likely to remain intact, the election could induce significant short-term movement, potentially accelerating the anticipated downward shift.
Conclusion
In summary, we expect the S&P 500 to experience further short-term downside before moving into the final upward push of Wave 5, aiming for the 6,100 mark. The current market setup, as illustrated in the charts, provides a precise view of the broader structure and highlights potential pivot points. Given the upcoming political events, the situation remains volatile and highly engaging.