Since the beginning of the year, the US Index gained over 4.0% and last week alone rose in excess of 1.0% in addition continues in a bullish phase since mid-November 2017.
Last week the Index rallied with a narrow range and managed to close near the high of the week, additionally closed above the previous week high, which suggests a strong bullish momentum.
Stochastic is showing an extreme overbought market and is setting lower highs while price is making higher highs, signs of a potential bearish divergence.
Seems like the US Index may be losing its upward strength is as it approaches the Fibonacci expansion at 1,625.4. The bearish divergence could be signaling a downward correction in the near future although we still are in a strong bullish trend.
Expecting a downward move to a weekly support at 1,524.3 on a break below the previous week low at 1,590.8 (scenario 1) however a bounce from the weekly support at 1,524.3 may trigger another upward run to a Fibonacci expansion at 1,625.4 (scenario 2).