S&P 500 Index made a stunning recovery by bouncing over 36% after the catastrophic crash in March. The recovery helped investors to recoup some of the losses, but the rally seems to be fading as the daily volume continues to decline.
The volume flow indicator flipped negative with divergence shows a lack of interest from the investors. An increase in price accompanied by a decrease in volume is usually a bearish indicator.
Current recovery shows a retracement to 0.618 Fib level which usually is major resistance. It also coincides with a longterm horizontal resistance between 2940-2960 which S&P experienced since mid-2019. A failure to break this level means an end of the current rally with bears taking control for the near short term.