US 500 index (Cash) is experiencing some limitations around the 2,893 resistance, where the upper Bollinger band presently resides. The smoothed appearance in price action over the last two weeks is also demonstrated in the flattening of the 200-period simple moving average (SMA), as the price holds between 2,893 and 2,708.
The short-term oscillators also reflect the stall in price and suggest a weakened state of directional momentum. The MACD, in the positive zone, is flattening slightly above its red trigger line, while the RSI, though showing optimism by pointing upwards, is hovering below it 70 mark. Additionally, the stochastic lines have fallen out of the overbought territory and possess room to move to the downside.
Should the index start to plot losses, the 50-period SMA at 2,820 coupled with the mid-Bollinger band, could apply the initial restriction to the downside ahead of the 2,789 level, that being the 50.0% Fibonacci retracement of the down leg from the all-time-high of 3,396.64 to the multi-year low of 2,183.95. A step down could encounter the 100-period SMA and lower Bollinger band at 2,758 before the 2,708 base. Conquering this key border, another important support section from the 38.2% Fibo of 2,646 to the 2,629 trough – which encapsulates the 200-period SMA – could test the decline.
To the upside, immediate resistance may come from the 2,893 obstacle where the upper Bollinger band resides, prior to the 61.8% Fibo of 2,934. A push past that may meet the 2,986 barrier before a successful climb shoves for the area from the 76.4% Fibo of 3,109 to the 3,138 border, involving the peaks of March 3 and 4.
Summarizing, the short-term neutral-to-bullish picture for now looks weak below the 2,893 barrier. That said a break below 2,629 could increase worries for a downside move returning.
