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This stock index seems to be gaining traction on its reversal, but it looks like another pullback is due.

Do you think it’s time to buy the dip?

Here are the correction levels I’m watching:

S&P 500 Index (SPX500): 4-hour

S&P 500 Index 4-hour Chart

S&P 500 Index 4-hour Chart

After busting through a longer-term descending trend line, the S&P 500 index appears to be gathering bullish momentum by forming a fresh ascending channel.

Can it keep climbing from here?

The short-term channel top held as resistance on the latest rally, paving the way for a quick pullback to nearby support levels.

The handy-dandy Fibonacci retracement tool shows where more bulls might be hanging out. In particular, the 61.8% level looks like a prime spot to hop in, thanks to all that confluence.

See how it lines up with the bottom of the channel and the former trend line? It’s right around an area of interest, too!

I’m seeing a new bullish moving average crossover, hinting that buyers are ready to hit the gas. Also, Stochastic is starting to pull higher after a brief dip to the oversold region, so the index could follow suit.

If the upcoming FOMC statement turns out well for risk appetite, this equity index could pop higher and even bust through the channel resistance.

On the other hand, another sharp increase in U.S. borrowing costs might mean more downside for higher-yielding assets like stocks.

Either way, brace yourselves for crazy volatility if you’re trading during this top-tier event!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.