S&P Futures are trading nicely higher since prices turned sharply to the upside more than a week back after a break out of a downward channel that put impulsive price action in play.

Impulses are five wave patterns which for now is still not the case, so we assume that market is in corrective wave (iv) pull-back to 1735 where price may find a support and turn up in to wave (v) towards 1770. At 1735 you will find a former wave four as well as 38.2% Fibonacci retracement area compared to wave (iii) where typical fourth waves will find a base.

Critical invalidation level stands at 1709, at wave (i) swing high, because we know that in impulsive trend price of wave (iv) must not trade into the territory of a wave (i) otherwise the wave count is wrong.

Forex Analysis by Gregor Horvat at ForexPros. com