SPX Tech analysis by Simon Kazinsky on 00:49 April 17, 2017 EST
It has been easy to remain bullish on the Standard and Poor's 500 index as the chart showed 2 moving averages first being resistance before the US election and then turning into support after the event.
But every trend comes to an end and the index is showing weakness. In small time frames it can be seen that it tried to recover after breaching supports but then it was rejected at those levels.
Stocks remain overpriced as a whole with an average PER of 26 which, in historical terms, it has only happened for very brief periods of time, namely AFTER the beginning of an important correction. This time is different and the extreme valuation is happening before any meaningful dive.
My preferred strategy is to start building a short position as the downtrend gives signs of being here to stay. The next important level is at 2,300 where the round figure matches a previous top.
Above 2,380 the index will hint that it is not over on its ascend and the ideal bullish target would be then at 2,500.