SPX500 Analysis – Has the Bottom Formed or Is More Downside?Hello traders,
Taking a closer look at the SPX500 and discussing whether the market has found a bottom or if there’s further downside ahead. From a technical perspective, price action is still showing signs of weakness, with critical support levels yet to be tested.
Key Technical Points:
• Bearish Expansion: A key swing high formed before price broke structure with a volatile bearish move, ending a year-long bullish pattern.
• Confluence Support at 4779: This level aligns with the value area high, 0.618 Fibonacci retracement, and a high timeframe support zone.
• Next Target if Support Fails: If 4779 is lost, the point of control (POC) becomes the next downside target.
The recent bearish expansion suggests a shift in market sentiment. Although the 4779 region could offer a technical bounce, it is crucial to wait for confirmation. A strong reaction from this level may provide short-term relief, but without follow-through, it could be short-lived.
If this support zone breaks, we may see an accelerated move towards the POC, which would confirm a deeper correction. This would likely spill over into other global markets, potentially triggering a broader risk-off environment.
Given the current high volatility, it’s essential to let the market find equilibrium before making any major trading decisions. Patience and precision are key—wait for the next move to be backed by volume and structure before stepping in.
