Analyst thoughts: S&P 500 index
VIEW RETAINED: CORRECTION POSSIBILITY OFF THE 4630 LEVEL
The long-held bullish view is testing the target R0/R1** target range. The longer-term blue labelling (1,2,3,4 & 5) has been added to indicate the longer-term bullish bias.
While the bull trend remains intact the medium-term outlook is for correction probability to S0*.
This should be phase 4 of the impulsive bull trend to R2 (see the insert). This is an adjustment to the previous outlook of a bullish correction rather than a trend.
An eventual red W,X, Y correction could re-visit S1 as part of the longer-term bull trend.
The importance of the target area:
R1/R2* is cluster resistance where red 3 = 1.618 of 1, as common trending extension targets.
The RSI oscillator (lower panel) is overbought and diverging.
The recent sharp reversal candlestick (highlighted) could be an early sign of a top.
R1** and S0* will negate the medium-term illustrated view.
Technical conviction: Medium