For the first time since turning bullish in March, a few days after reaching its 2174 low, the pathway forwards for the S&P 500 has become less clear, according to Tony Sycamore, Director of Australia-based TECHFX TRADERS.
The sell off last Thursday (11 June) was deeper than expected and Sycamore thinks this brings into play the idea that the S&P 500 completed a 5 wave advance at the 3231.25 high (rather than at 2965 as he previously thought) and that a pullback towards 2700 is underway (see Chart). Based on this possibility, a sustained break below the 2965/45 support zone would justify a far more cautious stance. Until then, however, Sycamore says he will give the upside a chance to prove itself.
As such, Sycamore suggests using the 2965/45 support zone as the pivot; bullish above / bearish below.