Summary
The major stock indices remain in a short-term downtrend, with an ongoing series of lower highs and lower lows. The S&P 500 (SPX), at its pullback low on March 30, had given back 635 points (or 9.1%) from the January 27 all-time closing high. The SPX (at 6,583) remains slightly below its flattening 200-day simple moving average at 6,645 and well below its declining 50-day average up at 6,783. Both of these moving averages had offered support, but now represent potential resistance. Since mid-January, we have observed above-average volume on declining days, signaling institutional distribution. While the S&P 500 bounced late last week after the 14-day Relative Strength Index (RSI) dipped below 30% and cycled into minor oversold territory, significant overhead resistance remains. The SPX recently broke through chart resistance from the November 20 low, but faces additional chart resistance at 6,721 from the December 17 low. Additionally, the rally was recently capped by the 21-day exponential moving average and an initial 38.2% Fibonacci retracement of the recent decline. On the downside, the recent closing low of 6,344 for the SPX is initial chart support. The cu
