S&P500 is now trading in late stages of wave c of 5 of a big Elliott wave ending diagonal so traders have to be aware of an upcoming bearish turn, probably around 2815/2835 region. However, only a five wave fall may confirm a top in place. In our case we would have to see a drop below 2750 area.
That being said, we can also see a divergence on the RSI, which indicates an upcoming bearish turn.
An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes, they appear only as the final “C” wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement. Also the indicate a sharp reversal, once completed.
Elliott wave ending diagonal example:
