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Can bulls make another run before bears take over? I would say they still can!

Looking at that chart it is difficult to argue for bulls to make one more higher high/
The structure looks toppy and may be considered having topped.
Though subwave (C) of wave (5) up has not tagged a normal 123.6% ext of subwave (A) of wave ( 5 ) up. That is an argument in favor of One More Higher high scenario.

Note that SPX has not even broken under EMA 8 on Monthly, the long term bull train is still working.

The next step in analysis is to zoom in and check a micro structure of the final subwave (C) of wave ( 5 ) up.

S&P 500 Monthly chart updated on 1-20-2022

And here we can more or less easily identify all five waves but its not clear if wave 5 up has been completed.

S&P 500 Daily chart updated on 1-20-2022

That is a bullish wave count where this sharp decline is subwave Y of wave 4 down to be followed by another large A up, B down, C up structure making a new all time high

The idea behind this count is that subwave (B) down of wave ( 5 ) up bottomed in Sep 2020.
That means we should be able to count an impulsive five wave up rally off that low.

4,460 is a very strong level for SPX (cash index).

This is where we have an import 66.7% retracement fib and a standard 123.6% ext of subwave (c) down.

Break under that level would make that Bullish Count quite unreliable.

P.S. By the way we had a similar daily candle with a brutal bearish intraday reversal in December.
The following morning price opened with a climatic gap down and was climbing into the close.

S&P 500 Daily chart updated on 1-20-2022

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