SPX Index defends 50% retracement level

The SP500 index opened with a bearish gap on late Sunday, but it managed to rally since then, and the index entirely erased the gap, only to turn lower again shortly after. 

During the London session, it was seen hovering at around 2,810 USD, some 0.5% weaker on the day. 

On the decline, the price touched the 50% retracement level from the March drop, which is now serving as the first strong support. It looks like the latest rally could be over, and US indices might rollover down. 

Another critical support could be at the 38.2% Fibonacci retracement level, which stands at around 2,645 USD. 

Alternatively, if the index starts to rally again, sellers could be organized at around 2,900 USD, and if this resistance is not held, the index might rise toward the 200-EMA at 2,950 USD.

Fundamentally, indices should go sharply lower as the forward PE ratio is the highest ever, meaning stocks are the most overvalued in history. However, the Fed is pumping massive amounts of money into the markets, which is lifting shares. We shall see if reality wins, or the printers.
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