Strong resistance at $1,260 area
The daily chart of the SP shows the price reaching the strong resistance of the 1,262 area.
The previous local lows of mid March and mid June along with the 61.8% retracement of the last few months of the decline forms a strong resistance in this area.
From Elliot Wave perspective we are, most probably, at the end of the second wave of a 5 wave down move on the long term. This is no guarantee that there will be a reversal here. The maximum wave 2 can travel is at the early may peak in in the 1,376 area.
Another bearish sign is the bearish engulfing candle pattern formed in the last couple of days (without the current day). If the bulls will show further signs of exhaustion in the next few days (keeping this week’s highs intact) we could witness the end of wave 2.
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