EW Analysis: SPY May Face Another Decline

Hello traders!
Today we will talk about stocks, specifically SPY (S&P500 ETF) and its price action from Elliott Wave perspective.

At the beginning of June SPY turned sharply and impulsively down, clearly with five waves, which in EW theory actually indicates a bearish reversal at least in three waves A-B-C.

Currently we can see it finishing a corrective wave B, also with three waves a-b-c, where wave "c" should be made by five subwaves. Ideally we will see a fake Monday rise into a wave (v) of "c" that can be a nice bull trap before we may see a bearish turn.

If we also consider an important 78,6% Fibonacci retracement, strong channel resistance line and equality measurement of wave a=c, then ideal resistance would be around 318-320 area and this is from where we should be aware of another stock market sell-off now at the beginning of July, similar as occured at the beginning of June.

So, watch out for limited gains in the stock market in the upcoming week and if we see a strong decline from projected resistance zone, then we might be on the right track back to lows below 300 region for wave C, but the price needs to stay beneath 232.50 invalidation level.

Be humble and invest smart!
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Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.