S&P 500 index (US 500) exits the neutral zone to look at 3,000.

The S&P 500 stock index (cash) is eyeing the 3,000 level again after the violation of the tough 2,940 resistance-turned-support level put the market back into the bullish game.

Yet, traders could reduce buying exposures in the short-term as the RSI signals overbought conditions for the fourth consecutive day and the MACD loses momentum below its red signal line. It is also worth noting that the 50- and the 200-period simple moving averages in the four-hour chart have already established a golden cross and should that continue in coming sessions, traders could remain confident that the market may offset any weakness to retain an upward direction.

Surpassing the 3,000 round-level, the bulls would aim to chart new record highs probably around 3,100 once the previous peak of 3,027 is breached.

On the flip side, if the bears take over, the spotlight will turn back to 2,940, where a significant violation could extend the downfall towards the 2,893 level. Moving lower, the next stop could be near 2,860, while further down the 2,833-2,815 area could be of greater importance for the sell-off to keep going.

In brief, the S&P 500 index could slow down in the short-term as the market looks to be trending at the edge of the overbought zone. Saying that any pullback may not be enough to resume neutrality.


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Source: XM