S&P 500 Index Reaches Another All-Time High

On 13 August, we wrote about the S&P 500 (US SPX 500 mini on FXOpen) reaching an all-time high following the release of the CPI report. At that time, we suggested that the price might move towards the upper boundary of the ascending channel (highlighted in blue on the chart).

Since then:
→ the price has set a new record, forming peak 0 near the upper boundary of the channel;
→ it then fell back towards the lower boundary, where block A was formed;
→ and subsequently rose again to a fresh all-time high (F), coming close to the 6500 level.

The resilience of the blue channel underlines the prevailing bullish sentiment, which is supported by expectations of a Fed rate cut in September – an event seen as positive for the economy and potentially boosting corporate earnings. This optimism is so far outweighing the fact that Nvidia’s shares slipped slightly yesterday after the company’s earnings release (despite results exceeding investor expectations).

But is the outlook entirely cloudless?

S&P 500 Chart Technical Analysis

Looking at the 4-hour chart of the S&P 500 (US SPX 500 mini on FXOpen), there are grounds to make slight adjustments to the slope and width of the ascending channel to better reflect the latest data.

At first glance, the picture appears bullish:
→ long lower shadows around block A point to strong buying interest;
→ downward pullbacks (B→C following impulse A→B, and D→E following impulse C→D) halted near the classic 50% Fibonacci retracement;
→ higher lows in late August give reason to consider the formation of a cup and handle pattern.

However, the bears also have their counterarguments:
→ the 6,500 level could act as psychological resistance (with the risk of a false bullish breakout);
→ the upper boundary of the channel may provide resistance;
→ the marked extremes resemble a bearish rising wedge pattern.

Progress in establishing new highs is becoming weaker each time – it seems that the S&P 500 (US SPX 500 mini on FXOpen) bull market is running out of steam. This raises concerns about a correction – and with September’s long-standing reputation as the most unfavourable month for markets, a noticeable pullback could happen.

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