SP500 starts earning season below the horizontal resistance?

/ The article is not a trade recommendation. /

The reporting season started with a positive surprise from the big banks (JPMorgan Chase, Citigroup, Wells Fargo), but the forecasts are that this season will be with a drop in profits by 6.8% on an annual basis, and if the forecasts are confirmed, this will be the second in a row a down quarter, which does not suggest good fundamentals at current levels.

Besides the start of the rather emblematic reporting season, SP500 is also just below the horizontal resistance zone and 50% fibo (4150 – 4250). The trend is up, but price action shows a slowdown and exhaustion, and a resistance break is less likely at the beginning of the reports.

The zones with increased volumes from the last 30 days are (4080 – 4100) and (3950 – 4000), which means that in case of a possible return down, these zones can provide support.

The local support zone (4080 – 4100) is key to the direct bullish scenario, Sequential is 4 up and DeMarker remains in the overbought zone, indicating further upside potential and a possible test of 4180 – 4200 next week.

Alternatively: A close below the local support zone will confirm the development of a downward correction, which may trigger a test of (3950 – 4000)