• SPX500_m flirts above weekly resistance ahead of US CPI
  
• Bears in control on weekly timeframe
• Three potential targets identified.
• Bearish scenario invalidated If 4401.1 price level is broken
• Will key US inflation report support SPX500_m bulls or bears?

The SPX500_m seems to be in the process of a technical bounce on the daily charts with prices flirting above key weekly resistance ahead of the US CPI report later today. Nevertheless, bears remain in firm control on the weekly charts. Even though the current correction wave is strong – it is approaching a point of possible resistance at the trend line.

On the daily timeframe, prices are at a weekly resistance turned support level and the bullish strength is undeniable with an extended correction wave in the current down trend clearly visible. This leaves the field open for either bullish continuation or a bearish intervention and the possible start of a new impulse wave in the down trend. Since both the weekly and the daily trend is downwards, a more detailed bearish opportunity is discussed on the H4 chart.

The H4 chart reveals more details with a strong bullish trend in progress. As mentioned above the higher time frames as well as the effect on traders based on the CPI news event might cause the bears to take over again.

Attaching a modified Fibonacci tool to a trigger level near a last bottom at 4343.3 and dragging it to a stop loss just above a last proper swing at 4401.1, three possible targets can be established:

• The first possible target at 4314.3 (Target 1) with risk management in sight.

• The second potential price target at 4273.9 (Target 2) – located just before weekly support level.

• The third and last price target is feasible at 4236.3 (Target 3) if bears can break through the weekly support level.

If the price at 4401.1 is broken, this scenario is no longer applicable.