US 500 stock index (cash) is extending its slide from the June 16 high of 4,446.77, but the negative momentum appears to be weakening somewhat as the price approaches the 20-day simple moving average (SMA).
Technical indicators continue to point to a bearish bias in the near term but there are some early signs that the selling pressure is subsiding. The stochastic oscillator is headed towards the oversold territory, while the RSI’s decline is slowing even before reaching the 50 neutral mark.
Should the negative pressures ease off further, the 20-day SMA, which is being bolstered by the 61.8% Fibonacci retracement of the January-October 2022 downtrend in the 4,310 region, stands a good chance of halting the slide. A rebound off the 20-day SMA would switch the attention back to the 14-month high of 4,446.77.
However, this remains an extremely challenging area as there are several hurdles within this vicinity – the 4,500 level lies slightly higher, followed by the 78.6% Fibonacci of 4,533.37. Further up, the March 2022 peak of 4,637.36 poses one final test before the all-time high of 4,817.51 comes into scope.
But in the event that the bears prevail and the price breaches the 61.8% Fibonacci, the index would then be eying the 50-day SMA, currently at 4,213.49, and the 50% Fibonacci of 4,153.64. A drop below these key levels would risk shifting the bullish medium-term outlook back to neutral, which would be confirmed if the downside correction reaches the 200-day SMA just below the 4,000 handle.
To conclude, US 500 is still in selloff mode but the impending support at the 20-day SMA could help turn things around for the bulls. On the other hand, breaching it would endanger the positive outlook in the medium term.
 is extending its slide from the June 16 high of 4,446.77, but the negative momentum appears to be weakening somewhat as the price approaches the 20-day simple moving average (SMA). ){kind=link}