Thursday's Market Minute: S&P Churns Above 4200 On Waning Momentum

S&P 500 futures broke above 4200 in the overnight session, continuing their almost relentless march upward with new all-time highs. Except for last week’s volatile and range-bound price movement, the /ES has scarcely paused for a breather since March 24; it notched only 7 red candles during an 8%-plus climb in a little over a month.

However, the uptrend is slowing as price tightens within the boundaries of a rising wedge pattern, tracing along the highs since mid-November and the lows since early March. Technical studies show waning momentum, with a sluggish MACD slightly tilted toward the bearish side that has barely moved for more than a week. Additionally, the RSI displays bearish divergence because it failed to make new highs with price after the Apr. 16 highs. This doesn’t necessarily mean a crash is coming, but it suggests price consolidation and a stall in trend.

Price levels that could be important for today’s trading include the boundaries of the rising wedge pattern near 4170 and 4215, with a potentially key support area near the confluence of the 21-day Exponential Moving Average, the yearly Linear Regression Line, and the previous lows all around 4110 to 4120.

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