While US stocks suffered steep selloff overnight, the outlook isn’t generally that bad yet. S&P 500 is still holding well inside rising channel, and above 55 day EMA. The trend defining support of 3694.12 is indeed still a bit far away. So, outlook is staying bullish, in a way that rise from 3233.94 is still not under threat yet, not to mention the up trend from 2191.86. Though, bearish divergence condition in daily MACD is a warning.
NASDAQ is looking a little bit more vulnerable as it has already tested corresponding trend defining support of 12985.05. Firm break there will open up the case of deeper pull back towards 12074.06 resistance turned support. That could be an early warning of deeper correction in other indices.
But at the same time, let’s not forget that DOW just made a new record high earlier this week. It’s holding well above 55 day EMA, as well as 29837.30 support. The bearish divergence condition in daily MACD is not enough to indicate major topping yet. So overall, it’s still early to declare the arrival of medium-term scale correction in US stocks. Let’s wait and see.