The US stock market turned into a sharp decline last week after the weak American economic data. On Friday, the S&P 500 moved towards supporting its channel as of January 12, but since that channel was broken, along with supporting the 6020 swing, we now have important warning signals, indicating that a more complex correction is revealed and that it depends on the stocks slightly longer. You can follow more weakness after a relief gathering.
At this stage, we are neutral to American stock indicators, but based on the analysis of the Elliott wave, I see an opportunity for more weak in the short term after the relief gathering. The current style indicates the graphic pictured below to the presence of a potentially constant surface correction, which means that the price may decrease to 5800, which is a major support level, especially given that 5784 was low after Trump’s victory in the US elections in November 2024. It could be Stops about this price and the enormous liquidation “will help” stabilize this step.
Before that, there is another important support zone in 5882, which is in line with a large gap in the monetary market as of January 15 – a level that can provide temporary installation. Note that usually when filling these large gaps, the price tends to the opposite.
But what is most important at the present time is that in the smaller time frame, a decrease from 6162 on SP500 appears to be reckless on the watch graph (the first graph above), which is very important when determining the temporary direction. Looking at this structure, after a relief gathering, we must prepare for more negative aspect.
In addition, the PUT recall rate increased slightly over the past week, but it has not yet reached extremist levels such as those seen in August, September, or December of 2024. This indicates that fear is still completely not exist yet And, and this means that the market may need more negative aspect before stability.
Source Stockcharts
But despite this sale on the past few trading days, it still seems that SP500 still constitutes only a high -degree correction within the larger upward trend, instead of higher in place. Therefore, I think the upper trend can still appeal before the summer.
If you like this analysis and want more updates on the S&P 500, I cover this market daily in the Forexanalytix member section, along with FX pairs, gold, silver and even some cryptocurrencies.
have a great day!
Grega Horvat
Forex Analytix
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