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The contributors for Forbes offer a bearish technical outlook on the S&P 500 index, citing that the US benchmark charted an island reversal candlestick pattern on the daily chart a day before.

Key quotes

“The S&P 500 set its all-time intraday high of 3,393.52 on February 19 and declined by a bear market 35.4% to its March 23 low of 2,191.86. This was followed by a bull market rebound of 47.5% to a high of 3,233.13 set on June 8.

On the rebound, the S&P 500 reached its 50-day SMA on April 17, then crossed above its quarterly pivot at 2,979.6 on May 26. The S&P has been above its monthly pivot at 3,062.1 since June 2. The gap higher on June 5 began the island reversal.

The gap lower on June 11 confirmed the island reversal, where you can draw a circle around the price action between June 5 and June 10, which is considered a technical sell signal. “

S&P 500 closes below 200-day SMA

The index closed Thursday managed to close above the 3000 mark but remained below its 200-day SMA at 3,013.4. The Wall Street index lost nearly 6% on the day, registering the worst day since March 16.

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