SP500 - SELL IDEA

SP500's latest price action, through the lens of Elliott Wave theory, is indicating a potential SHORT setup. The completion of what appears to be an impulsive wave (3) and a corrective wave (4) suggests that a downturn might be on the horizon as part of a new impulsive wave sequence.

The corrective wave (4) has retraced to the 0.382 Fibonacci level of wave (3), which often acts as a resistance in such setups. If this pattern holds true, we could expect wave (5) to initiate a bearish run, potentially targeting the Fibonacci extensions below the end of wave (3).

Given the recent overextension in the markets and rising concerns over valuations, this bearish outlook aligns with a broader sentiment of caution among investors. Timing will be key; a strategic entry point can be sought at the end of wave (4), with a stop-loss set just above its peak to manage risk efficiently.

Traders considering this SHORT position should keep a close eye on market reactions at key Fibonacci levels and adjust their strategy accordingly to capitalize on the expected downward movement.

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