Chart of the day

Where do we stand fundamentally?

The S&P 500 (SPX) has been showing mixed signals in recent weeks, reflecting some volatility as it heads into November 2024. Analysts highlight a potential short-term correction of up to 7%, driven by technical indicators suggesting investor complacency and weaker seasonal trends. This pullback, however, is generally viewed as temporary, with many strategists considering it a "buy the dip" opportunity, suggesting that the broader market's long-term uptrend is likely to remain intact despite near-term fluctuations.

Additionally, historical patterns offer a positive outlook for 2024 overall. Based on past performance following years with strong double-digit gains, there’s a roughly 66% chance the SPX could continue to rise, particularly if economic conditions remain favorable and the Federal Reserve eases its monetary stance. The upcoming presidential election also adds to the market's complexity, with election years historically showing varied impacts on stock movements depending on broader economic and policy expectations.

SPX is retesting the previously broken upside resistance of 5720. We need a bounce from here for an upside continuation in the uptrend fifth Elliott Wave to 6000 and higher. Invalidation of this immediate upside extension could come upon a break below 5700.

An invalidation level of a fifth-wave long-term extension higher and a bullish cycle continuation is much lower at 5600 meaning we are in the strong bull uptrend. As said the continuation of an extension could lead to a 6400 target in the medium-term to long-term if SPX bounces here and sustains a breakout above 5820.

_{Try a long trade entry with a stop loss below 5650 to target 6000 and higher. You can trade it with options as well}