Red lines- bullish channel
Blue line- support trend line
SPX is trading around 4,457. Medium-term trend remains bullish as price continues trading inside the red upward sloping channel since last year. As we mentioned in previous posts, SPX is vulnerable to a bigger pull back towards 4,200 at least. SPX has increased chances of testing the lower channel boundary. This will become our primary scenario of SPX price breaks below the blue upward sloping trend line. This trend line now provides support at 4,420. With a lower high already formed, if we see price break 4,420 and 4,360, then a move towards 4,200 will be expected. Bulls need to push price above 4,540 to forget any short-term pull back.
