In the comments section of the last post, i mentioned that SPX is unlikely to exceed recent highs, and might be in a range for a while. Here's two scenarios:
1. Barrier/Contracting Triangle = sideways + more upside (Target: 1234)
After what looked like an impulsive decline, prices retraced a good portion of it, before going sideways in a contracting range. This could be a triangle with a-b-c-d legs complete. There could be an e wave down, towards 1197/1190 followed by a thrust up towards 1234. An initial move down, followed by a sustained break above 1204 will confirm. A clean break below 1190 will make scenario 2 more likely. Check out the elliott wave tutorial if you like more info on the different forms of triangles.
2. Impulse wave 3[C] down next (towards 1150)
A closer examination of the 5-min chart below, lends support to this view. First move down from 1204 could be impulsive 1[A] down. Subsequent moves could be counted as a corrective (a-b-c) wave 2[B] up - that finished yesterday - with waves 3[C] down, 4 up & 5 down to follow. A break below 1190 will confirm. Support at 1176, followed by strong support around 1150 area - previous high & rising long-term trendline(white). Letters in [brackets] reflect the alt count, catering for the possibility of only a 3-wave A-B-C move down.
In either scenario, the initial move should be down. And we're closing in on some kind of a top(short/medium-term) here. All the best!
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