S&P 500 Index may be forming a swing high near the 50 day moving average area ahead of renewed weakness towards 1904.78

The rebound off last Thursday’s 1904.78 low seems to be corrective. The index reached 1964.04 Friday (Aug 15^th) and tested 20 day moving average (purple line) and 50 day moving average (aqua line) before reversing lower. With the indicator still weak, scope remains for the index to form a swing high under the 1964.04/1965.14 resistance zone ahead of extending lower to retest the 1904.78 low and 1902.87/1902.17 support area near the rising wedge support (thick purple trendline).

On the upside, a decisive break through the 1964.04/1965.14 resistance zone would signal basing and resumption of the broad uptrend towards the 1991.39 record high for a retest.

Trading bias:

Sell Short under 1964.04 area

Stop above 1980-1992

Target around 1904-1902 then 1881

S&P 500 Index daily chart