The S&P500 index closed rather flat following two consecutive weeks of declines after touching new all-time highs.
However, in the process, the trend line that we were closely watching broke, pushing prices lower.
On a daily basis, the index managed to make a modest rebound to test the 3388 level. However, failing to breakout higher, price action reversed, thus forming resistance.
As a result, we anticipate further declines. The index could continue its declines as it approaches the 3200 handle once again.
Establishing support near this level could possibly shift the bias to the upside. It would also mark a modest correction before resuming the uptrend.
However, in the near term, the declines to 3200 would mean that the S&P500 could remain within the 3388 and 3200 regions, forming a sideways range.