S&P 500 formed a Bearish Engulfing top and reversal candle 27th of July while there is massive RSI and MACD divergence. Strong indication of a reversal that has not yet materialized, Bulls are still too strong.
But divergencies i.e., an imbalance in the market cannot go on forever and will eventually needed to be traded out usually by a correction, but also sometimes by an even higher indicator level. In this case RSI needs to close above 76.36 value, which will require a massive bullish move.
First indication of the latter would be a close above the Bearish Engulfing candle i.e. a close above 4,607.
A break below the low of the Bearish Engulfing candle i.e., below 4,527 is likely to fuel a sell-off down to support at around 4,455, possibly down to 4,400 level. Strong support at around 4,328
If S&P500 is closing above 4,607 the top and reversal pattern is demolished and the uptrend is set to be extended