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  • US 500 index calms near the 261.8% Fibonacci extension level
  • RSI and Stochastics are flattening

The US 500 (cash) index has been moving with weak momentum over the last couple of sessions after the surge towards a new record peak of 5,449.73, holding near the 261.8% Fibonacci extension level of the up leg from 4,924 to 4,100 at 5,425.   

The market is looking overstretched as the technical oscillators are moving horizontally near their overbought territories. The RSI is flattening around its 70 area, while the stochastic oscillator posted a bearish crossover within its %K and %D lines above the 70 level, indicating a potential downside retracement.

Moving higher, traders would pay attention to the next uncharted round numbers such as 5,500 and 5,600.

Alternatively, a bearish correction could drive the market towards the immediate 5,350.15 support level ahead of the long-term ascending trend line at 5,300. Below these lines, the 50-day simple moving average (SMA) at 5,217 and the support region of 5,140-5,190, which encapsulates the 20-day SMA, may halt negative movements.

Summarizing, the index looks neutral in the very short-term view, but the broader outlook is still strongly positive.


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