US500: The Market Has Been Growing without Corrections by 2% for 266 Consecutive Trading Sessions

The S&P 500 remains in its longest rally since 2018 without a decline of at least 2%, according to data compiled by Bloomberg; analysts note that there hasn't been a correction of this size in 266 trading sessions.

The positive sentiment of market participants is due to:
→ the prospect of lowering interest rates by the Federal Reserve;
→ enthusiasm for AI and its positive impact on economic development.

However, although the fundamental background is strong, current estimates of the US500 index may be overestimated — in fact, this is the essence of the correction.

The US500 chart shows that:
→ the price is in an upward trend (shown by the blue channel);
→ the price moves in the upper half of the channel, and the median line acts as support — a sign of strong demand;
→ on the morning of March 14, the market is showing signs of positivity, indicating that an attempt to overcome the resistance of 5,200 points and take a new record high may be made in the near future.

However, the MACD is holding back optimism — the popular oscillator is forming a bearish divergence pattern, which hints at the gradual fading of bullish impulses.

Given the above, bulls should be cautious as the market looks vulnerable to a correction, such as to the lower border of the channel. But this requires a trigger. One of these could be news about inflation in the US; the values of the Producer Price Index (as well as data on retail sales in the US) will be published today at 15:30 GMT+3. Be prepared for spikes in volatility.

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