S&P 500 technical analysis review 8th April 2024

Last week highlighted the powerful long term trend that the index has been in for the past few months. Pushing up a breathtaking 27% in the latest move. A push this powerful has not been seen since the initial recovery from the pandemic crash. We highlighted last week the strength of the trend was even pushing down to the hourly chart as well. For this reason we again zoom into the hourly chart.

On this chart we have again a 200 period and 100 period linear regression channel, both of which had been containing all of the recent price action, until the break lower last week.

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We highlighted last week that it would be difficult for the market to experience any real nervousness while these strong trends remained in place. But now we have our first test. Can the buyers return to enough scale to keep this bullish move in place, or is this the first warning sign?

We have thrown up a ghost projection of what the bears will want to see in the days ahead, namely an expected bounce from the oversold areas, but then a lack of follow through buying. Where projected price then drops to fresh lower lows. On any such move this would cause more jitters in the market as this would threaten the end of the powerful bullish trend.

As things stand however we can expect the buyers to be tempted back into the markets with enough scale to lift price action up towards 5,200 in fairly short order. What happens then will be highly watched. Can the buyers maintain control, or is this the first sign of the trend easing? We will know more in the coming days, with price action around 5,200 as key.

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