The S&P 500 had been trading within a wide sideways range between 2815 and 2945 since August 6th. However, that was up until today. During the Asian trading, the cash index emerged above the upper bound of the range and at the time of writing it looks to be testing the 2970 key barrier, which provided strong support between July 10th and 31st. This suggests that the actual index may open with a positive gap today. So, having all that in mind, we would consider the near-term picture to have turned positive for now.
If the bulls are strong enough to overcome the 2970 barrier soon, we may see them setting the stage for larger extensions, perhaps towards the 3013 zone, which is marked as a resistance by the peak of August 1st. If they are not willing to stop there either, a break higher may allow them to put the all-time high on their radars, which is at 3028.30 and was hit on July 26th.
Looking at our short-term oscillators, we see that the RSI stands fractionally below 70, but points up and looks ready to cross back above that barrier. The MACD lies above both its zero and trigger lines, pointing north as well. These indicators suggest strong upside speed and support the notion for some further advances in this index.
On the downside, we would like to see a decisive dip below 2935 before we abandon the bullish case. Such a move may confirm the return of the index back within the pre-discussed wide range and may initially allow declines towards the 2890/95 zone, which provided support this week, and acted as a resistance between August 26th and 28th. Another break, below that zone, could allow further declines within the range, perhaps towards the 2860 level, or the 2852 support, marked by the lows of August 27th and 28th respectively.
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