A little over a month ago, we sent out a note highlighting a reversal pattern on the S&P 500 Index (futures) where we indicated a buy signal and an MFU-4 price target near 4800. Well, the high came in at 4808.25.
The S&P 500 Index has sharply corrected from that stretched price level, falling quickly toward the 4300.
This area is marked by an MFU-2 downside price target which is typically where we see a significant counter trend move (in this case perhaps a reversal higher).
This is a good area to look for oversold stocks, even if for a trade. I wouldn’t be surprised to see a strong bounce before any selling resumes. Note that the next potential downside price target is 4061 (our MFU-3 area). But that may not be hit for weeks (if at all). We will need to continue to monitor this correction and how it plays out.
S&P 500 Index Emini Futures Chart
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