The S&P 500 (SPX) 12/01/22 to 12/02/22 decline has given several clues that the rally from mid – October is likely to continue.
The 5 – minute chart courtesy of Trading View illustrates the action.
The drop from 4,100 has the look of an Elliott wave – Zigzag correction. The decline so far has retraced less than 50% of the prior rally which is relatively bullish. The subsequent rally off the 12/02/22 bottom was able to exceed potential Fibonacci resistance at the .618 retracement level.
Most importantly is when the 12/02/22 bottom was made.
The largest stock funds need liquidity and probably do most of their trading during the main SPX hours of 9:30 AM to 4:00 PM – ET. The SPX bottom on 12/02/22 was made immediately on the open at 9:30 AM.
Key points to watch during the SPX 12/05/22 session – the “B” wave high at 4,087.29, a move above this level opens the door for a rally above the 12/01/22 top. A break below the 12/02/22 bottom at 4,026.63 could trigger a drop to at least the .618 retracement level at 4,000.
Four Dimension Trading 