SPX is trading around 3,900. In our last analysis on SPX, price was above 4,000 and we warned traders that market conditions justified a pull back towards the 38% Fibonacci retracement of the entire rise from 2020 lows.
Black lines -Fibonacci retracements
Red lines - Fibonacci extension targets
SPX has reached so far the 100% Fibonacci extension target of the first leg down. Price is in a bearish trend making lower lows and lower highs. There is potential to see SPX reach the 38% Fibonacci retracement level at 3,800-3,820 area. This pull back in stocks could unfold into a bigger pull back towards 3.500 or even towards the 3.200 price level where we find the 61.8% Fibonacci retracement. Currently bears remain in control of the trend, there is no sign of an upward reversal.
