Chart of the day

SPY is bouncing higher from the 435 support. A bounce higher from here leads higher to the upside extension and a test of 455 again where it could reverse or continue higher.

This is still viewed as completing the medium-term fourth wave pullback of the five waves upside long-term if we get a confirmed bounce from here and a break above 455 now or after the consolidation phase. A break below 435 is now required for a downside reversal and invalidating of the possible upside reversal. A break below this level will confirm that the upside five waves are possibly finished and open a short trade possibility, or we could see a deeper fourth wave pullback.

Long trade, you can open here with a stop loss just below 435 if you are more risk averse because this is not a clear direction. You can only open short trade entries in the case of a confirmed break below 435. We favor the long trade entries as we expect an upside extension from this vital support at the rising wedge. You can trade this price action using an options strategy as well.