FX.co ★ Short-term SPX analysis.

Last week when price was trading above 4,600 I warned traders that the upside potential for SPX was very limited and that we preferred to be neutral if not bearish. SPX technically remains in a medium-term up trend, but we had reached key targets and Fibonacci levels that justified a pull back.

Red lines - Fibonacci extensions

Black lines- Fibonacci retracements

Our expected pull back target area was between 4,450 and 4,350 as a minimum. So far price has reached as low as 4,500. Our target of 4,450 remains very possible to be seen this week. Upside potential remains limited to 4,670 plus or minus 20 points. The risk in opening long positions is high relative to the potential gain according to our analysis and that is why we continue to prefer to be neutral if not bearish. Support is at 4,500 where we find the 23,6% Fibonacci retracement of the entire rise from 4,170. Failure to stay above this level will lead price lower towards 4,450 at least.