As I’ve warning several times that the worst is not yet over despite many bear-market rallies, SPX was rejected by the blue dotted midline of the upchannel from 2009 & was unable to fill the downgap near 4k which instantly became a resistance now.
BEWARE: lower lows are coming with SPX barely holding a previous low @3820, a FIB 0.382 retracement from pandemic low. The next strong support will be 3500, the FIB 0.50 level, a 27% drop from ATH. 3500 is a confluence of 3 impt FIB levels. Besides the 0.50 that I mentioned, it is also the 1.618 FIB ext of the 3820 abc relief rally & the 0.854 FIB ext of the 4117 Feb 24 invasion low abc relief rally. 3500 is also the projected zone where SPX may retest the green 2018 Megaphone top.
WORST CASE SCENARIO: If my green support zone @3400 to 3500 fails, then 3000 to 3200 (yellow zone) will be the maximum pain zone. 3200 is the FIB 0.618 retracement from pandemic low. This yellow zone is also the projected area where SPX may come to retest the red 1995 TL or the blue lower side of 2009 upchannel.
This big ABC capitulation phase will end wave IV sometime near 4Q2022 & the last melt-up rally of wave V may end somewhere in the 5100 to 5400 zone near the top of the upchannel around middle of 2023.
Not trading advice
BEWARE: lower lows are coming with SPX barely holding a previous low @3820, a FIB 0.382 retracement from pandemic low. The next strong support will be 3500, the FIB 0.50 level, a 27% drop from ATH. 3500 is a confluence of 3 impt FIB levels. Besides the 0.50 that I mentioned, it is also the 1.618 FIB ext of the 3820 abc relief rally & the 0.854 FIB ext of the 4117 Feb 24 invasion low abc relief rally. 3500 is also the projected zone where SPX may retest the green 2018 Megaphone top.
WORST CASE SCENARIO: If my green support zone @3400 to 3500 fails, then 3000 to 3200 (yellow zone) will be the maximum pain zone. 3200 is the FIB 0.618 retracement from pandemic low. This yellow zone is also the projected area where SPX may come to retest the red 1995 TL or the blue lower side of 2009 upchannel.
This big ABC capitulation phase will end wave IV sometime near 4Q2022 & the last melt-up rally of wave V may end somewhere in the 5100 to 5400 zone near the top of the upchannel around middle of 2023.
Not trading advice