This week saw one of the most mixed price action towards the newly formed all-time highs for the 500 best US Companies – The ongoing opening bell is not showing much juice to retest the overnight highs and other global indices are also correcting on the session.
The Earnings season has been more than decent but looking at the price action, buyers seem to have come to an exhaustion point.
Despite a Daily Golden Cross leading to 11 consecutive new highs, the price discovery for the S&P looks to be stalling at a key zone of interest, coming short of the 6,400 psychological level for both the CFD and actual Index.
Many of the best performing assets in the year have started to form local tops: looking at the strong retracement in Gold, Bitcoin, the freshly formed Double top in the Nasdaq that sellers are starting to lean up on and the Dow Jones just retesting its ATH just yesterday without breaching the level.
This week had some decently positive news that could have boosted momentum for equities further such as Trump confirming he won’t fire Jerome Powell and the finalized US-Japan Trade Deal.
Read More: UK Retail Sales Gets Summer Boost, Trade Deal Optimism Wanes & FTSE 100 Steady
Positioning and Sentiment at an extreme
Wherever you look, Market participants mention how strong the ongoing US Trend is and how such strong momentum cannot be faded – This is far from an invitation to sell highs but to trade with more caution looking ahead.
The S&P 500 Put/Call Ratio is coming at a trough and such positive & negative spikes tend to coincide with some tops, particularly amid extreme Fear/Greed levels.
I remember the 2022 Bear Market concluding on an extreme put ratio against calls – The trough isn’t forming such a spike today but the extremes are close.
S&P 500 Technical Analysis from the Daily to intraday charts
S&P 500 Daily
The S&P 500 has been flying upwards particularly since the end of the Israel-Iran conflict after forming lows at 5,930.
There hasn’t been much selling, with almost no daily candle closing below the prior with this pushing Daily RSI to overbought levels.
Overbought RSI is by definition a standard in such strong trends – Such technical signs don’t always traduce with a correction but at least an exhaustion in the move.
You may also take a peek at the Potential Supply trendline that is not too far from current trading – But a closer look is more than required for further analysis.
S&P 500 4H
Looking closer, we can spot candles that are looking less strong particularly as buyers are stepping against the 1.272 Fib-Extension from the War lows to the July 3 Local top.
Momentum is currently retracting from overbought and momentum is starting to become slightly more neutral.
Buyers will want to re-enter above the longer-run upwards Channel formed with the April 2025 bottom and will need to breach the current highs on strong momentum – Local CFD Highs at 6,391, Index at 6,381.
S&P 500 1H Chart
Looking even closer, buyers haven’t given up just yet, especially with RSI momentum not breaching the neutral line.
Except for the higher timeframe warning signs, holding above the 1H-MA 50 still give the short-term hand to the bulls, but they will have to break the last swing highs to gain further traction.
Levels of interest to place on your charts:
Support Levels:
- Mini-Support and 50-H MA 6,370
- 200-H MA 6,315
- Key Support 6,300
- Past week lows 6,230
Resistance Levels:
- 6,390 to 6,400 Current highs resistance
- Potential Resistance at Fib extension 6,420
- Level to breach for new ATH 6,391
Safe Trades!
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