The S&P 500 was in a downtrend until a lower bottom formed on 13 October.  Bulls found the price attractive at those levels and the momentum in the market started shifting.

A closer look at the Momentum Oscillator reveals positive divergence between points “a” and “b” when comparing the bottoms at 3559.0 and 3492.4. This could have alerted technical traders that the current trend might be losing steam.

After the lower bottom at 3492.4, the price of the S&P 500 broke through the weekly resistance level at 3661.5, and the bullish activity was further confirmed when the 15 and 34 Simple Moving Averages and the Momentum Oscillator broke through the 100 base-line into bullish territory.

Since then the market has made four impulse waves in the uptrend before a lower top formed on 24 November and the market seemed to begin to lose some bullish momentum. The bears tried to pull the market lower but the bulls found new backing near the weekly support level at 3920.0 and a new impulse wave started on 30 November.

As long as the bulls can sustain the upward momentum, the outlook for the S&P 500 on the D1 time frame will remain bullish.