The US benchmark index was heading for a fifth straight day of losses on Monday as it broke below the 1900 level to hit a low of 1830.40 at the start of US trading. Today’s sell-off to 10-month lows could push prices to test 1812.75, which is the support level from the October 2014 downturn.
With prices now sharply below the moving averages and the Ichimoku cloud, the medium-term outlook is looking increasingly bearish. The US index has breached the 200-day moving average several times since late June but was able to bounce back above it on each occasion.
The latest slide could be part of a longer-term correction. But with the Stochastics and the RSI both in heavily oversold territory, prices could attempt a rebound in the near term. The nearest resistance is likely to come at 1924.25, which was a previous closing low on two occasions last October.
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