The SPX avoids a breakdown for now

At the end of last week, the SPX took an abrupt turn to the upside, breaking above $4,800 and establishing a new all-time high. Then, yesterday, the U.S. trading session was somewhat muted, and all major U.S. indices recorded only slight changes. We continue to monitor MACD and Stochastic on the daily chart, where they attempt to reverse to the upside; simultaneously, we watch out for the RSI, which is already pointing to the upside, hovering slightly below 70 points. If the RSI breaks above this level, it will bolster the odds of the SPX continuing higher and testing $4,900 (and potentially $5,000); contrarily, a failure to break through 70 points will raise a small warning. Besides the mentioned indicators, we will also pay attention to the support at $4,816. If the SPX loses ground above this level, it will add to the concerns.

Illustration 1.01

Illustration 1.01 shows the daily chart of the SPX’s RSI.

Technical analysis gauge
Daily time frame = Neutral (turning bullish)
Weekly time frame = Slightly bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

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Illustration 1.02

A slightly concerning relationship between the price and volume keeps developing on the weekly chart of the SPX.