The S&P500 Market, on the H4 time-frame, was in an upward move until the 5th of July when a higher top was recorded at 3000. Selling pressure overwhelmed buying pressure as the bears started to find the price attractive, causing the upward momentum to be reversed.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 2977 and 3000. This could have alerted technical traders to a possible reversal in the making.
After the high at 3000, the price broke through the 15 and 34 Simple Moving Average, the Momentum Oscillator broke the zero baseline and there was a crossing of the 15 and 34 Simple Moving Averages, called a Death Cross. All of these further strengthening a possibility technical reversal in progress.
A likely critical support level formed when a bottom was recorded at 2958.3 on the 9th of July. Buyers tried to push the market higher but supply overcome demand with an Engulfing Candle forming at 2983.6 on the 10th of July.
If the S&P500 breaks through the critical support level at 2958.3, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the lower bottom at 2958.3 and dragging it to the top of the last pullback at 2983.6, the following targets may be calculated. The first target can be anticipated at 2942.6 (161 %). The second price target can be predicted at 2917.3 (261.8%) and the third and final target may be expected at 2876.3 (423.6%).
If the lower top at 2983.6 is broken, the scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the S&P500 Market on the H4 time-frame will remain bearish.
A closer look revealed that the Momentum Oscillator displayed negative divergence between point a and b compared to the price at 2977 and 3000. This could have alerted technical traders to a possible reversal in the making.
After the high at 3000, the price broke through the 15 and 34 Simple Moving Average, the Momentum Oscillator broke the zero baseline and there was a crossing of the 15 and 34 Simple Moving Averages, called a Death Cross. All of these further strengthening a possibility technical reversal in progress.
A likely critical support level formed when a bottom was recorded at 2958.3 on the 9th of July. Buyers tried to push the market higher but supply overcome demand with an Engulfing Candle forming at 2983.6 on the 10th of July.
If the S&P500 breaks through the critical support level at 2958.3, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the lower bottom at 2958.3 and dragging it to the top of the last pullback at 2983.6, the following targets may be calculated. The first target can be anticipated at 2942.6 (161 %). The second price target can be predicted at 2917.3 (261.8%) and the third and final target may be expected at 2876.3 (423.6%).
If the lower top at 2983.6 is broken, the scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the S&P500 Market on the H4 time-frame will remain bearish.