Overnight S&P 500

The S&P 500 index was lower overnight as it extends this week’s decline below the 25% retracement level of the March-June rally crossing at 882.35. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near- term. If September extends this month’s decline, the 38% retracement level of the March-June rally crossing at 845.09 is the next downside target. Multiple closes above the 20-day moving average crossing at 900.54 are needed to confirm that a short-term low has been posted. From a broader perspective, the September S&P index appears to be forming a broad head and shoulders top. Closes below 873.10 would confirm a downside breakout of neckline support thereby opening the door for a possible test of the 38% retracement level of the March-June rally crossing at 845.09. First resistance is the 10-day moving average crossing at 894.20. Second resistance is the 20-day moving average crossing at 900.53. First support is Wednesday’s low crossing at 865.50. Second support is the 38% retracement level of this spring’s rally crossing at 845.09. The September S&P 500 Index was down 6.70 pts. at 872.20 as of 5:59 AM CST. Overnight action sets the stage for a lower opening by the September S&P 500 index when the day session begins later this morning.