Last week’s fine rally in the S&P 500 index has given way to some profit-taking this Monday, allowing for bearish action which has chipped 0.46% off the index’s value as of the time of writing.
Last week’s rally came off some dovish comments from notable voices within the US Federal Reserve. The sentiment brought on by the “lower for longer” dovish Fed tone carried the indices to new records.
This week promises a relatively heavier economic calendar, and this may be causing traders to sit on the sidelines as well, as trading volumes appear thin. US bond yields are also rebounding, and this is adding bearish pressure on the US indices.
Technical Levels to Watch
The outlook from Friday remains unchanged. A decline from the all-time high is expected to target the 38.2% Fibonacci retracement level at 4062.8 (6 April low), with 4022.1 and 3981.4 (61.8% Fibo retracement) expected to serve as additional downside targets.
On the other hand, an extension of the uptrend towards upside targets at 4200 and 4301 (100% Fibonacci extension level) requires that bulls initiate a break of the all-time highs. This could come from a direct push beyond the 4191.3 resistance (ATH) or it could come from dip-buying at any of the support levels within the C-D wave range.