We have seen the US Stock market as represented by the S&P 500 correct back for the past few days in a shortened holiday week after it painted a new high on the first trading day of April. The market is now in a support area where some buying had occurred earlier in mid- and late March.
We see the potential of an Up Thrust on the daily chart along with three symmetrical pushes to the upside. The weekly chart shows a clear struggle to go higher after the drive up and above last May’s (and last year’s) high. These indications suggest a further reaction ois possible. The S&P e-Mini futures (not shown) also shows a weakening picture.
While we may see a bounce off of support tomorrow, I can see further downside in the offing. A logical action for the market to do next would be to test last May’s/year’s highs. That would take us back over the next few weeks to around the 1350 level (basis cash market) as highlighted on the weekly chart.
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