Pullback Tests Bull Conviction Near Key SupportUS SP 500 CFDFOREXCOM:SPX500FOREXcomWe've seen a rare pullback in our S&P 500 contract, providing an opportunity for bulls to buy, but whether they should remains the question. RSI (14) shows bearish divergence, setting lower highs even as the price sets higher highs, warning that upside strength is beginning to subside. It's a complementary message to the one coming from MACD, which has crossed below the signal line and rolled over. The message from the oscillators is far from bearish, but it does underline the need for caution when entering fresh longs after the scale of the bullish move seen beforehand. I'm watching the price action around 7517 right now, marking the intersection of uptrend support and the breakout level from the last leg higher in late May. We've already seen one bounce from it in Asia, but it's unconvincing at this stage. Should 7517 hold firm, longs could be set with a stop beneath the trend line for protection, targeting a retest of the record high at 7620. Alternatively, if the price breaks beneath the support zone and closes below 7500, another setup worth considering would be to short with a tight stop above for protection, targeting 7430 initially. The May 8 low of 7315 looms as another option should the price rally unravel. Despite the warning from the oscillators, longs are still marginally preferred at this point, although my decision will be determined by the price action, not headlines or momentum. Good luck! DS