S&P 500 Down, But Not Out

Published 01/24/2022, 09:50 AM
Updated 07/09/2023, 06:32 AM

The bears control US stocks on the short and medium-term trends, but the longer-term weekly trend remains.

S&P 500 Index weekly chart.

Last week was a big down week in the S&P 500 as shown on the chart by the relatively big down bar. However, the overall weekly SPX trend is still up.

Price has broken through the Ichimoku Cloud Base line, but the price has not reached the Ichimoku Cloud. The market's weekly momentum remains up. Price looks to be testing the pivot low from Oct. 4, 2021.SPX Daily Ichimoku Cloud Chart.

SPX appears to be in free fall on the daily chart. When price broke through the equal length swing of wave 20 to 21 at 4548 it fell quickly. Price hit both daily profit objectives and found support at the Span B and Fibanocci .786 target.

Price could extend down further to 4301 at the wave 18 old pivot lows.

SPX 60-minute Ichimoku Cloud Chart.

Price was rejected by the Ichimoku Cloud at the top of wave two before the big down move. Price has dropped into our 60-minute Ichimoku Cloud wave target zone.

Expect a reversal bounce as the price has exceeded the .618 target within the wave target zone. The reversal bounce is unlikely to change the short-term trend; instead, look for the price to pull back towards the Ichimoku Cloud.

Price is very extended from the Ichimoku Cloud on the daily and hourly charts with its latest down move so anticipate it will take a breather before making its next move.

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