U.S. stock markets have been on quite a run lately, but are we finally seeing signs of a rally correction on the S&P 500 index?
Check out these nearby inflection points!
S&P 500 Index (SP500) 4-hour Chart by TradingView
Optimism for business-friendly policies under another Trump administration have allowed U.S. equity indices to surge, pushing the S&P 500 index past the ceiling around $5,900 onto fresh record highs past the $6,000 barrier.
This psychological mark appears to be holding as strong resistance, however, paving the way for profit-taking to spur a correction to nearby support zones.
Are stock market bulls about to hop back in soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. stock market, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The Fibonacci retracement tool shows that the former resistance area is spanned by the 50% to 61.8% levels and a rising trend line that’s been holding since mid-October, as well as the dynamic support at the moving averages.
A shallow pullback could even find buyers at the 38.2% Fib that lines up with the pivot point level ($5,904.23), potentially taking the index back up to the swing high and beyond.
The 100 SMA is still above the 200 SMA to suggest that the uptrend is more likely to resume than to reverse, but keep an eye out for a move below S1 ($5,793.32) and the trend line that could mark the start of a downtrend.
As always, stay on your toes for headlines that could impact overall market sentiment and practice proper position sizing when taking any trades!
