Tuesday’s oversold relief bounce is testing formidable resistance at the S&P’s 2862. Momentum has been strengthened but does not appear strong enough to generate widespread breakouts. The longer the index stays below that level, the more vulnerable it is to lower prices

the current overbought situation together with the fact that the S&P is now facing a strong technical resistance does not call for an immediate break to the upside. So it would not be surprising to see the market churns around current level

an overbought pullback consolidation interrupted the March rally in the S&P. Although seemingly vulnerable to further short-term weakness, the overall technical backdrop remains positive so sell-off could be shallow because the sideline money will try to fight its way back into the market

S&P broke several supports last week. When key supports broke it means that long-term buying pressure has finally been exhausted. The stronger the support level, the more powerful the selloff. Nevertheless, support is strong near the 2800-2750 zone. This could help minimize downside follow-through and widespread breakdowns