SP500 : A SHORT-TERM CORRECTION IS DUE

- The market is trading inside a bullish channel since end of May ; The mid-term trend is then bullish for the Hedge funds' favorite index.

- The market has just reached a new all-time high above 5675pts, carried by rate cuts bets following strong Retail Sales data showing a more resilient US Economy than anticipated.

In addition, the technical landscape isn't really reassuring.
The RSI indicator has just broken-out its own bullish trendline, following a bearish divergence with the market.

Finally, the prospect of another Trump Presidency is reviving fears of both geopolitical and trade tensions with Asia.

- The bullish trend remains valid so far. But the bearish technical signs combined by the uncertain fundamental environment could push investors to take some profits out as the market just registered a new all-time high.
The scenario of a short-term correction can be seen as the most likely, with potential support levels located around 5,500pts, 5,390pts, and 5,300pts by extension.


Pierre Veyret, Technical Analyst at ActivTrades


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