The S&P500 index extended declines over the week following the breakdown near the minor rising trend line.
Subsequently, prices drifted lower before reversing losses just a few points above the 3200 handle.
Friday’s bullish close after the doji pattern suggests a near-term lift for the index.
However, price will now challenge the 3388 level. If resistance that previously formed near this level holds, then we could expect the S&P500 to maintain a sideways range.
In the event that prices can breakout above 3388 resistance, then expect the previous highs near 3590 as the next main target.
The VIX index as seen in the sub-window is within the normal levels indicating that the sell-off last week is likely to end.
To the downside, the 3200 level continues to remain a key level of support, which we expect to hold in the near term.