The US 500 cash index has rebounded off the lower channel support since breaking out of a rising wedge formation (coloured red).
A rising wedge formation, in an upward trend, warns that the trend has lost momentum and could undergo a correction in the near -term. In a strong uptrend the price would gravitate towards channel resistance while deviating from support. Currently the price is instead deviating away from the channel resistance (coloured grey) whilst gravitating towards support.
Although the long -term trend remains up, the above considerations suggest that the price action currently is weaker on a relative basis when compared to that of 2013. A further consideration would be that it has taken the last six days of gains to erase the two days of losses that preceded. Trend followers would be cautious to use these signals to trade against the long -term trend, but rather use a correction (if it occurs) as an opportunity for long entry.
Traders that contrary opinion or counter trend may look for short entry nearer the 1900 level with an initial support target back to 1800 being favoured, while a move towards channel resistance (1960) would indicate failure of the bearish signals as well as a resumption of healthy uptrend.
*Please note: The US 500 index can only be traded on an international account