US stock market technical analysis - S&P 500, daily, 18052010

The US markets have fallen a lot since the last technical analysis. Today the US Consumer Price Index (CPI) level is expected to be announced. The consensus figures are 0.1 (MoM) and 2.4 (YoY). Earlier in the day the Construction Output in the European Monetary Union (EMU) was declared to be 7.6% while for the previous period it was -7.2%.

The daily graph of S&P 500 (click on it for a better view) shows that the market is getting close to an oversold area. What is more interesting is if it will be a bullish divergence formed on the graph. Still the general direction is down and a test of the 1093 area is possible.

What is more interesting is the bullish divergence that is already formed on the 1 hour graph of S&P 500 which could signal an upward movement for today at least to 1120/25 area. If that gets broken, the market could go higher to around 1140.