As a reminiscence of the trade war, brewing international tensions with China could derail investor sentiment once again. After a two-week-long rally, the S&P 500 has retreated from its peak at 3989 in search of stronger support.
Divergence between the price action and the RSI was a sign of exhaustion. Then successive breakouts below 3936 and 3911 prompted short-term traders to take profit.
The latest rally could be a dead cat bounce unless it achieves a new high. To the downside, 3860 would be the next stop.