Technical Analysis – US 500 index retreats below 50-day SMA and uptrend line

The US 500 (cash) index declined below the significant 50-day simple moving average (SMA) and the long-term ascending trend line that had been holding since October 2020. The price is approaching the Ichimoku cloud and the technical indicators are heading towards their oversold areas. The MACD is falling beneath its trigger and zero lines, while the RSI is slipping underneath the 50 level.

Immediate support could come from the 4,361 barrier before meeting the lower surface of the cloud currently at 4,305 and then the 4,229 support. Even lower, the 200-day SMA at 4,119 may halt the bearish moves.

On the flip side, a successful jump above the ascending line and the SMAs could take the price around the record peak of 4,549.39. More gains could lead the market into uncharted levels, meeting 4,600, 4,700 and 4,800.

Overall, the index is creating a bearish correction over the last couple of days and only a jump above the SMAs may shift the bias back to positive.   

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