Since the beginning of the year, the US Index gained over 9.5% although last week made only a modest gain of 0.21% but remains in a bullish phase since early April.
Last week the Index went back and forward without any clear direction and closed in the middle of the weekly range, in addition, managed to close within the previous week range, which suggests being clearly neutral, neither side is showing control.
The stochastic is showing an extreme overbought market and is beginning to display a bearish momentum.
Seems like the buyers stopped buying the US index after the new year-to-date high at 1,720.5 made by it. Since the breakout of the previous 2018 high at 1,619 the Russell 2000 did not make any corrections so a downward correction might be around the corner.
Expecting a downward move to the 23.6 Fibonacci retracement at 1,647.2 on a break below the 100 Fibonacci expansion at 1,680.6 (scenario 1) however a bounce from the 23.6 Fibonacci retracement at 1,647.2 may trigger another bullish run to the 100 Fibonacci expansion at 1,680.6 (scenario 2).