S&P 500 Index Price Analysis: Bulls run out of steam below all time highs

• S&P 500 Index meets resistance and moves into a sideways consolidation.
• Profit-taking could ensue as a result and downside demand areas would be challenged. 

The S&P 500 Index is struggling to convince on the upside as it begins to run out of momentum.

The following is a top-down analysis of potential liquidity zones on the downside should the market move into distribution. 

Weekly chart

The weekly chart shows that the neckline of the W-formation meets the 38.2% Fibonacci retracement of the weekly bullish impulse leg.

4-hour chart

The four-hour chart shows that there is a confluence of a 50% mean reversion and prior resistance structure that would be expected to act as support, in the vicinity of the 21-hour moving average. 

1-hour chart

While trading is reactive, not predictive, it does no harm in having some foresight and being prepared for expected price action.

In the following analysis, the hourly conditions are less bullish with the price now below the 21-hour moving average and testing the first layer of critical support. 

A break here will open prospects for the downside targeting a break of Tuesday’s low to open a run to Friday’s old record closing highs.