Last week we felt that the index looked vulnerable to a pullback, some selling has materialised in the past few days largely as expected, however the selling was not enough yet to feel that the sentiment is over.
The Dow Jones in comparison has moved back to its recent lows, for the S&P 500 to post a comparable move it would need to slide down towards the 5,100 area highlighted by us in recent weeks.
![](https://ukinvestormagazine.co.uk/wp-content/uploads/2024/06/Sp-500-3-624-1024x577.png)
The index has been in a broad bull run for the past year, wide blue channel. Within this broad channel price action had found some resistance from the parallel black line, which then became support on the minor weakness in April.
This support area continues to be the natural area for significant buying interest. So we are still concerned that the index could slip towards the 5100 area in the coming days before the buyers are confident enough to move back into the market in enough scale to turn the market. Also there are some signs that the “AI bubble” which had been powering the market is starting to cool
Leaving a cautious outlook again for the week ahead. On any move down towards the 5,100 area we would need a clear break lower to turn more outright negative, as for the moment it is more that the AI led buying of recent months has cooled and that some of the fizzle has left the market, rather than there being any serious signs yet that the powerful 12 month bull trend is under threat.