- The S&P 500 is trading 1.37% higher on Wednesday in another good session for equities.
- The technical signs are good at the moment but there is a key technical resistance nearby.
S&P 500 4-hour chart
The US bourses have been on a bullish run on Wednesday as risk sentiment remains positive. The price has just tested the black downward sloping trendline but we will need to wait to see if it manages to close above the level.
Looking at the red rectangle, the area represents a key resistance zone coupled with the 76.4% Fibonacci resistance. Elliott Wave analysts often look for a rejection of the 76.4% retracement when looking for a wave 1-2 completion. Unfortunately, we won't know if it is a wave 1-2 until the wave low just above 3000 breaks to the downside. If the level does break then the market could take a run at the highs. At the moment the high on the chart stands at 3233.25.
Looking at the indicators, the Relative Strength Index does have some more room to move to the upside. It is holding in a bullish area above the 50 zone and potentially could hit the overbought area soon. The MACD histogram is firmly in the green. One of the signal lines has crossed above the mid-level while the other is marginally behind.
The overall trend is still very much an uptrend. For a technical trend change to occur a break of 2936.50 is needed. This could complete a lower high lower low pattern and the market could head to lower levels. At the moment this is far from being the case, the trend is up and it will be important to see if the price can break the trendline by the close. If it does it could be the confirmation the bulls have been craving for.
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Additional levels
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