SPX - Bear market rally on a horizont?

After making a new low on 20th May 2022, SPX erased some of its losses and bounced back into the proximity of 4000 USD. Currently, it trades around the 3960 USD price tag. We continue to be bearish on SPX; however, after more than a month and a half of the selling in major U.S. indices, we are on the lookout for a possible bear market rally. Therefore, we will pay close attention to the sloped resistance indicated by the yellow dashed line. If SPX manages to break above it, then it might mark the start of the two-to-three-week bear market rally.

Technical analysis - daily time frame
MACD performed a bullish crossover; however, it still remains in the bearish territory. RSI and Stochastic point to the upside, which is bullish. DM+ and DM- show bearish conditions in the market. The ADX contains a relatively high value, suggesting peaking conditions or a very strong trend. Overall, the daily time frame is neutral/slightly bullish.

Illustration 1.01

The picture above shows SPX's return to the channel.

Technical analysis - weekly time frame
RSI, MACD, and Stochastic are all bearish. DM+ and DM- are also bearish. The ADX increases. Overall, the weekly time frame is bearish.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Trade active:

The bear market rally is taking place.