S&P 500 - Will The Resistance Stop and Reverse The Market?

The market keeps the uptrend movement. DMI is bullish, ADX line confirms trend market conditions and the strength of buyers. If we look at RSI and MACD lines, we can say that the market is overbought and we are not far from a correction movement or maybe a trend reversal.

We can see also that the price is not far from the strong resistance zone at 2935.00 level. The market tried to pass it two times in the past and failed. After that, we got a downward movement to 2350.00 level. This time the resistance also will be able to stop and reverse the market. For us, the price action at this resistance zone will be very important as the market will be able to give us new signals and ideas for further movements.

If the price bounces from this zone, we should be ready to see a sideways or a downward movement. For confirmation the falling the price will have to break the local uptrend line and 2870.00 support level. This signal can be used for opening short positions.

If the price can break the resistance zone, the market will be able to continue the upward movement and reach 3000.00 level. It's the round number level and it's essential for the market. But buying based on this breakout can give a high-risk trade. As the market is overbought, it's better to wait for a correction movement and buy based on confirmed reversal signals in the direction of the main trend.