SPX has formed a corrective A-B-C zigzag formation on the hourly timeframe chart. The price has accomplished wave (b) at 4561, creating the final wave C of the corrective wave (c). SPX has occurred sub-wave 4 at 4333 and started forming sub-wave (5) of wave (C).
According to the Elliott wave principle, an impulsive cycle can only start after the breakout of the sub-wave (4). SPX has taken third support on the dynamic support line. Another clue could be the descending channel of subwave 2-4, and the breakout able to reach wave (B). If the price breakout wave sub-wave 4 of wave (C) at 4333, traders can trade for the following targets: 4416 – 4486 – 4540+.
We can see that the mid-term trendline is holding the price movement, and failure to sustain above the dynamic support can lead to worse conditions even if the price has retraced 61.8% of the overall move. Moving averages are trading above the price, and a rising RSI shows the strenth is about to come.
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