This week SPX tested the lower weekly channel boundaries and bounced strongly. Near the end of the week price has turned negative on a weekly basis but still inside the bullish channel. It is imperative for bulls to defend 4580.
Black lines - Fibonacci retracement
The lower channel boundary provides the first level of support at 4580. Failure to stay above this level, could lead to a sharp decline towards the Autumn lows near 4300. If a major top is in the making, then our most probable pull back should be towards 3800.
Blue lines -bullish channel
Black lines -Fibonacci retracements
SPX is still in bullish trend but the weekly RSI is warning bulls that the momentum is weakening. The 38% Fibonacci retracement of the entire rise from the Covid-19 lows in 2020 is at 3800 and it is a target justified and should not be ruled out. For now there is no top confirmation, but bulls need to be very cautious as a corrective pull back is more than justified. It would also be healthy for the market in order to pick up momentum for another bullish run.
