Breaking beneath the $3937 low of this week would welcome a drop to $3795 before another rally to $4340 – $4470 could emerge. Meantime, the November rally appears complete.
The S&P 500 reacted to Powell’s Wednesday remarks with an upside break to hit $4100 yesterday before plunging following better-than-anticipated Jobs data. That came after SPX saw sideways consolidation for two weeks.
Meanwhile, the price action completed a 5-wave EWP (Elliot Wave Principle) impulse setup from the 3 November low of $3698. Nevertheless, what should we expect from this whipsawing? Are we looking at a “what market giveth can take” scenario? Analysts expect the index topped at $4100.
Meanwhile, it should be dedicated to the more bulbous W-b to $3795 before welcoming another rally to $4240 – $4470. Meanwhile, a low break beneath $3937 this week will affirm this thesis. Technical indicators flashed tiredness, with pessimistic divergences and ready for a downward move. Nevertheless, this isn’t a signal by a condition.
The Market Can Still Subdivide Higher
Nevertheless, failure by bears to ensure a breakdown would welcome an alternative case. That would make an immediate 5-wave rally to $4350 – $4400 the main path. However, though analysts predicted an upward or downward move, the analysis is from a probability standpoint and has no certainties.
Thus, market players should approach the market with then and if narratives. Analysts offer their views by assessing probabilistic movements according to price action structure. For instance, they can forecast EWP, but pattern breaks because prices breaking beneath or above a given mark shows the analysis was wrong.
That makes the alternative EWP operable. There isn’t a single option within a probabilistic atmosphere. And the contrary case means we aren’t in a probabilistic but a certainty environment.
Conclusion
The S&P 500 hit $4100, following 2-week go-nowhere moves. Friday’s decline represents a final dip before the index soars. That’s the primary battle strategy. Nevertheless, the contingency plan is the index may hit $4350 – $4400 amid quick breaks beyond Thursday’s peak without a more substantial pullback.
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