Hello traders! The S&P 500 Index is starting to show price weakness. Clearly lower lows and lower highs are being printed while the downtrend trendline is being rejected. At the same time, the uptrend trendline along with the 50 Exponential Moving Average was broken, suggesting further bearish pressure.
However, right now the S&P 500 Index is facing support at 3420 confirmed by 61.8% and 38.2% Fibonacci retracement levels. The low has been produced at 3410 and perhaps this is the key price to watch in the near term future. Because daily break and close lower should confirm either a strong downside corrective move or even the beginning of a freefall.
Upon the break below 3410, the S&P 500 Index is expected to drop towards the 3200 psychological support area, which is confirmed by 427.2% Fibs and also corresponds to the previously established low.
Nonetheless, currently, it is a waiting time as the price might break either above the trendline or below the support. Action will take place after the breakout will occur.
Bias: Strongly bearish while below 3520
Potential Resistance Zone: 3440 – 3470
Potential Targets: 3200
Have a profitable trading!