S&P Futures; Ending Diagonal Suggests a Temporary Bear Market

Daily Forex Technicals | Written by TheLFB-Forex.com

Weekly chart trend: Mixed. Main price points: 665.50, and 1252.50. Looking for: Move to 50% Fibonacci level.S&P Futures are very bullish on the weekly chart, after a powerful bounce off of the 665.50 support area that was created at the start of this year. This recent uptrend, however, could be a pull-back in wave 4 of a bearish impulse count, with wave 5 yet to come. In this case, wave 4 must not overlap the territory of wave 1.The converse technical view is that it may also be a start of a new long-term uptrend, if we consider a possible three wave structure from the 1586 top to the 665.50 lows.The makret has recently broken through the long-term trend-line and 38.2% Fiobnacci level, which may be a key for a move near to 50% area.



















Daily chart trend: Long. Main price points: 865, and 1030. Looking for: Wave 5
S&P futures are showing an impulse structure on a daily chart after a break of 957 over the past weeks. Wave 5 of this wave count is technically set, as the prices have broken through the previous wave 3 highs, which is confirming a move into a higher wave 5 target around 1030 area. The target will be valid, as long the 865, wave 4 lows holds.When we compare the daily wave count with a weekly count, it seems that a huge wave 4 is not the case here, as we have in impulse structure on a daily chart. The wave 4 is a corrective wave and not impulsive wave, which means that a much higher level is easily possible to be reached later this year.

4 Hour chart trend: Mixed. Main price points: 963.75. Looking for: Ending diagonal
The S&P futures market is still moving around the 1000 psychological area, searching for a top of a red wave V). This wave V) is a sub-wave of a black wave 5) that completes the whole five wave pattern from the 665 lows to the current highs shown on the daily chart above. The fact that the market came out with an ending diagonal in a wave 5) position, suggests that a top is in place and that a near-term down-trend will happen soon.However, the 963 support area needs to be broken on the four hour chart for a down-trend confirmation. Any break through the current highs above the 1000 area will signal for a higher wave 5) target around the 1030 zone, which will invalidate the current diagonal pattern.