The S&P500 index has slowly but steadily closed above the key price level of 3674.8, marking a new all-time high in the index.
This comes as the VIX index remains steady near the levels of 20. The gains come primarily on speculative trade following discussions on the new coronavirus stimulus bill.
However, a lack of any follow-through on concrete measures in the US Congress could disappoint investors.
This leaves the S&P500 vulnerable to the downside.
For the moment, the 3674.8 level is likely to hold out as support. But if the index loses this level, then we expect the declines back to the 3388.8 level of support.
To the upside, price action will need to continue posting new highs to confirm the uptrend.
However, for the moment, we expect to see a retracement ahead of any gains if any.
In the unlikely event that the S&P500 loses the 3388.8 level of support, then we could expect a larger correction down to the 3275 level next.