SPX500 _m in “impasse” after stunning rally
<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a> </strong></p>
<ul>
<li>SPX500_m printed a doji candlestick on Monday</li>
<li>Doji candlestick reveals traders’ indecision</li>
<li>Bulls see impasse as calm before surge to 4400</li>
<li>Countertrend opportunity beckons for bears</li>
<li>Benchmark stock index still exposed to US Treasury yields moves</li>
</ul>
<p> </p>
<h3><span lang="EN-US" xml:lang="EN-US">SPX500_m may revert to one of its widely-followed moving averages, following the mute session on Monday 6th November.</span></h3>
<p><span lang="EN-US" xml:lang="EN-US">Note how this index posted a <strong>doji </strong>on the daily timeframe yesterday.</span></p>
<blockquote>
<h3><span lang="EN-US" xml:lang="EN-US"> <em>A doji candlestick typically reveals traders’ <strong>indecision</strong>.</em> </span></h3>
</blockquote>
<p><span lang="EN-US" xml:lang="EN-US">Hence, Monday’s candlestick formation on the daily timeframe implies that traders are on the <strong>hunt for a fresh reason</strong>, either to extend the recent surge, or pull back.</span></p>
<p> </p>
<p><span lang="EN-US" xml:lang="EN-US">SPX500_m bulls may have entered an impasse after last Friday’s (November 3rd) breakout of a downward sloping channel drawn from the September 14th close .</span></p>
<p><span lang="EN-US" xml:lang="EN-US">The index is currently sitting well above its <strong>21-day</strong> <strong>simple moving average</strong> (SMA) and the bears may see an opportunity to retest these <strong>key support areas</strong>:</span></p>
<ul>
<li><span lang="EN-US" xml:lang="EN-US"><strong>50-day SMA</strong></span></li>
<li><span lang="EN-US" xml:lang="EN-US"><strong>4339.0:</strong> the 78.6 Fibonacci level</span></li>
<li><span lang="EN-US" xml:lang="EN-US"><strong>4313.7:</strong> downward channel resistance (now acting as support)</span></li>
<li><span lang="EN-US" xml:lang="EN-US"><strong>4289.2: </strong>21-day SMA converging with the golden 61.8 Fibonacci level</span></li>
</ul>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user16/SPX500_m.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="8368c2dc-7b48-41b3-be68-9476b79688b4" data-src="/s3-static/users/user16/SPX500_m.png" /></p>
<p> </p>
<p><strong>A break back into the downward-sloping channel</strong>, with a solid close below its golden 61.8 Fibonacci level at <strong>4289.0,</strong> may see a further decline in the SPX500_m where bears may set sights on new lows below <strong>4106.0. </strong></p>
<p>The Fibonacci retracement level is drawn from the October 12th high of 4402 to the October 27th low of 4106.0.</p>
<p> </p>
<blockquote>
<h3><em><strong>From a bullish perspective,</strong> this impasse may be the calm before another raging rally.</em></h3>
</blockquote>
<p>The S&P 500 may persist with its gains if investors keep hold of the perception that US bond yields have peaked and could unwind further.</p>
<p>A failure to retest the support areas mentioned above, or a failure to hold a close below 4313.7, may see SPX500_m bulls aim for highs above <strong>4400.</strong></p>
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