On September 21 S&P 500 Index broke below the ascending channel, which could have been the first stong bearish signal. Price has reached 3208 low and corrected up strongly. On the correction, the S&P 500 Index tested 3550 high where it cleanly rejected the 88.6% Fibonacci retracement level.
Perhaps this was the very top of that pullback, from which price might continue the decline. This could be either a small move to the downside or a beginning of a massive price collapse, similar to the one that occurred at the beginning of this year.
Being conservative, the price could drop towards 3200 psychological support to produce a double bottom. This level corresponds to 55.6% Fibs applied to the June downside correction down, where 61.8% Fibs was rejected. It also corresponds to the already established supply/demand zone, which once again could be acting as strong support.
But if the S&P 500 Index will manage to slice through the 3200 level, selling pressure is likely to increase further. In this case, this might be a confirmation of a long-term downtrend. In regards to the upside risk, only a daily break and close above 3550 will invalidate the bearish scenario and the price is likely to continue printing all-time highs.
Key support levels: 3410, 3200
Key resistance levels: 3440, 3550
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
Perhaps this was the very top of that pullback, from which price might continue the decline. This could be either a small move to the downside or a beginning of a massive price collapse, similar to the one that occurred at the beginning of this year.
Being conservative, the price could drop towards 3200 psychological support to produce a double bottom. This level corresponds to 55.6% Fibs applied to the June downside correction down, where 61.8% Fibs was rejected. It also corresponds to the already established supply/demand zone, which once again could be acting as strong support.
But if the S&P 500 Index will manage to slice through the 3200 level, selling pressure is likely to increase further. In this case, this might be a confirmation of a long-term downtrend. In regards to the upside risk, only a daily break and close above 3550 will invalidate the bearish scenario and the price is likely to continue printing all-time highs.
Key support levels: 3410, 3200
Key resistance levels: 3440, 3550
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis .
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.