Blue lines- bearish channel
SPX is under pressure. Price has formed a downward sloping channel over the last few weeks as price pulls back from 4,612 top to 4,400. In previous posts we warned traders of a coming pull back as the extended rise in price combined with bearish RSI divergence warnings, suggested a pull back was coming. We continue to consider this as a normal and justified pull back inside a major up trend. Most probably we are at the beginning of a multi week corrective phase that is expected to bring SPX lower. Currently resistance is found at 4,470 and as long as we trade below this level we consider the short-term trend to be bearish. The RSI has just provided a bullish divergence with the recent new lower low but this is not a reversal signal. We might need to see at least one more bullish divergence in order for the chances of a strong bounce to increase.