US stocks appear to have run out of steam on their rally, and this stock index appears to be poised for a major reversal.
Has the uptrend finally reached its peak?
Find these turning points on the daily time frame!
S&P 500 (SP500) Daily Chart by TradingView
In case you missed our latest market report, you should know that the US stock market is back in sell mode again thanks to another decline in the technology sector and the general risk-off sentiment.
In particular, Nvidia shares led the decline with a massive 9.5% drop, followed by other chipmakers. Even companies like Alphabet and Netflix weren’t immune!
The S&P 500 index posted losses of more than 2%, falling after retesting the broken long-term uptrend line visible on the daily time frame.
Does this mean that the US stock index is heading towards a long-term downtrend?
Remember that directional biases and volatility in market prices are usually driven by fundamental factors. If you haven’t done your homework on stocks and market sentiment, it’s time to check out the economic calendar and stay up to date with daily fundamental news!
The index is approaching the near-term downside target at the pivot point level (5,464.65) and sustained downside momentum could lead to further losses to S1 (5,274.55) near the August lows.
However, the 100 SMA is above the 200 SMA, indicating that the path of least resistance is to the upside or that there is a chance for the long-term uptrend to resume.
Just watch for any move below the 100 SMA dynamic support, as this could serve as further confirmation of a trend reversal. You should also watch for The most important movements in the market this weekincluding the release of the first-rate US non-farm payrolls data!