SP500 Rises on Monday

As it has become a good habit - it seems that every sell-off is followed by a steep rise on the SP500 index­ - Monday's price action followed this pattern. Friday's decline brought the index from daily highs of 2,795 USD to daily lows of 2,750 USD, but the price rose overnight and was trading at 0.40 per cent higher during the London session, hovering around 2,776 USD.

There is a bullish divergence on the daily chart between the price and the RSI indicator, which seems to currently be helping bulls to push the price higher. The first resistance is at previous highs near 2,780 USD and if broken, further rise toward the short-term bearish trend line at 2,785 USD could occur.

If this trend line is broken, the short-term outlook could switch to bullish, with the next target for bulls probably being at Friday's highs, which is slightly below the 2,800 USD mark.

Bids might be located at around 2,770 USD and, if this support is broken, the price could decline to 2,760 USD or possibly to the current swing lows near 2,750 USD. The medium-term trend may remain bearish if the price consolidates between 2,800 USD - 2,730 USD.

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