The US 500 cash index has recorded heavy losses over the last few trading sessions as negative pressures linger. Moreover, the 50-day simple moving average (SMA) is looking ready to cross below the 200-day SMA, increasing fears of a sustained bearish outlook. However, the index is currently trading close to its lower Bollinger Band indicating that an immediate upside reversal is not out of the equation.
The short-term momentum indicators are painting a negative picture too as the RSI is decreasing below its 50 neutral mark. Also, the MACD is found below zero and its red signal line, which indicates that the negative momentum in the price might be gaining further traction.
The bears seem to be holding control over the last few trading sessions. Should they manage to push the price below the June low at 4,137, selling pressures could intensify, opening the door towards the 4,106 barrier. A break below the latter could then pave the way towards the May low at 4,034.
On the flip side, if the bulls resurface, initial resistance might be found at the 4,270 level before buyers eye the 4,390 hurdle. A break above that point could send the price towards the region which includes the 200-day SMA currently at 4,474, the 50-day SMA and the 4,495 obstacle. Moving above this area could turn the fortunes around for the index, opening the door towards the September high of 4,550.
In brief, despite the fact that the latest downside move might be a bit overextended, the pair’s outlook remains bearish. For sentiment to change, buyers would need to break above the 200-day SMA.
