Equity Indices Weekly (14 May ’17)

US SPX to find difficulty maintaining current levelsPrices have regained the upside, with marginal new highs now made around 2400. Rising stochastics highlight potential for further strength, but the falling RSI and bearish Tension Indicator suggest increased difficulty sustaining higher levels.

Resistance up to the 2467.50 Fibonacci projection should prove difficult to reach, as investors maintain a cautious stance.

Risk is for a corrective pullback towards the 2361.37 gap low from 20 April. A close beneath here will open up lows down to critical support at the 2322.25 low of March, as investors adopt a neutral stance. Further slippage, however, will turn investors outright bearish, as a deeper reaction then unfolds.

Next significant support will then be at the 2233.62 low of December, as prices begin to correct the broad February 2016 rally.

 

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