US 500 Index Gaps Higher; Holds ATH in its Scope

Technical analysis of Forex market

The US 500 index (Cash) gapped above the 50-period simple moving average (SMA) today re-establishing a positive bearing towards the upper Bollinger band, near the recent all-time high of 3,715. The dictating bullish bearing in the SMAs remains robust even though the 50-period SMA’s upward pace is marginally easing.

The short-term oscillators are reflecting a pickup in positive momentum. The MACD above its red trigger line is pushing over its neutral threshold, while the RSI is trying to improve in bullish territory. The stochastic oscillator’s %K line is rising in the overbought region, promoting price’s push higher.

If sellers attempt to fill the gap from earlier today, they may encounter instant support from the 50-period SMA resting on the upper part of the formed gap of 3,665-3,674, which also contains the mid-Bollinger band. Successfully diving and filling the gap, the bears may face the 100-period SMA at 3,648 ahead of the lower Bollinger band, in the vicinity of the 3,629 trough. Losing further ground, the index may then meet the 3,594 border. Sinking even deeper from here, the price may target the 200-period SMA at 3,565 and the support section of 3,545-3,552 existing beneath.

However, gaining some traction off the 50-period SMA at 3,674 may propel the index to new all-time highs. The first resistance in the way looks to be from the 3,707 level, which happens to be the 150.0% Fibonacci extension of the down leg 3,550-3,233, until the all-time high of 3,715 that also encompasses the upper Bollinger band. Triumphing over this heavy ceiling may extend the index towards the 161.8% Fibo extension of 3,746. Should persistent bulls continue to push into unexplored waters, the price may challenge the 176.4% Fibo extension of 3,792, adjacent to the 3,800 handle.

Summarizing, the short-term positive bias prevails above the SMAs and the 3,629 trough. A shift below the base of 3,511-3,523 may trigger negative worries.