Sharp Stock Reversal

Today 04/21/22 the S&P 500 (SPX) opened above the high made on 04/20/22. The  rally lasted only 21 – minutes, what followed was steep drop that continued throughout the trading day.  The few rally attempts were shallow, the bears  dominated.

The 5 – Minute SPX chart courtesy of Trading View illustrates the action.

The rally from the 04/18/22 bottom is choppy, characteristic of corrections to the main  trend. in this case the presumed trend is  down. The 04/21/22 drop is smooth and steady; it looks like an Elliott impulse wave.   

There are always alternate Elliott wave counts. A  bullish alternate wave count from the 04/18/22 bottom has a count that begins at the Minute wave “a” – boxed high.  The subsequent Minute wave “b” could be the first part of an  Expanding Flat correction.  The rally to the 04/21/22 high could be the second part of the Expanding Flat.  The 04/21/22 drop could be the third and final part of the Expanding Flat.

The next 5 -minute SPX chart illustrates the alternate wave count.  

If within the next few trading days, if the SPX exceeds the 04/21/22 high, this potential Expanding Flat will be further examined.

The 04/21/22 sharp decline warrants  caution.  Traders are long 50% non-leveraged SPX related funds from the 04/18/22 open.  Sell half  of the position on the SPX open  04/22/22. Sell the remaining  half if the SPX moves below 4360.00.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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