Technical Update - SP500 above 5K? Nasdaq100 eyeing 18K. Could Dow Jones reach 40K?

S&P 500 forgot all about being in a correction mode and propelled higher Friday lifted mainly by Meta, Amazon and Nvidia.
Uptrend has resumed but RSI divergence persists i.e., the strength indicator is not fully supporting the bullish trend. However, the trend is your friend and divergence can be traded out.
S&P 500 is likely to test 5K possibly spiking to 4,110 level but for RSI divergence to be cancelled an RSI close above the horizontal dashed line is needed.
First indication of that scenario potentially to play out is an RSI close above its upper falling trendline.

However, on the weekly chart there is no RSI divergence suggesting S&P 500 can move higher in coming weeks – RSI has simply cancelled its divergence by closing above the horizontal dashed line 200% of the Q3 correction is at 5,110.

One could argue that the weekly chart of S&P 500 has formed a Cup and Handle behaviour. The Cup (from Q12022 through Q3 2023) should be more rounded to form a textbook pattern. However, the behaviour has been there and the Handle is quite visible.
A potential price target based on A cup and Handle pattern is illustrated by the two vertical arrows i.e., 5,722. However, since the pattern is not of high quality and based on statistics the price meeting target is more likely to be around 0.618 at 5,296 (Bulkowski thepatternsite.com has calculated it to be 61% of the bottom of the Cup to top of the Cup i.e., the arrows.

A close below 4,682 is demolishing the bullish scenario. First indication of that scenario to play out could be S&P500 closing below 4,854 combined with an RSI close below its lower slightly rising trendline thereby also closing below 60 threshold.

Join my webinar Tuesday where I will discuss the pattern behaviour https://www.home.saxo/campaigns/webinars/2024/02/06/technical-update---feb