Article: The S&P500 faced a week of limited movement, closing just 28 points higher amidst a backdrop of weaker data and higher odds of rate cuts. The market's price action remained uncertain and choppy, leading to a bias for higher levels to squeeze out short positions above the 50-day moving average. However, analysts suggest that once this short squeeze is complete, a potential reversal lower could develop.

Market watchers are closely eyeing the level of 5168 at next week's close as a crucial reference point. The recent bounce in the market, which could break above the resistance at 5108, is expected to target the range of 5168-5174, where the possibility of another leg downward may emerge. The complex pattern that is currently unfolding in the market has prompted analysts to consider various techniques across multiple timeframes, seeking to provide a clear guide with important price levels and expectations for future market actions.

April concluded with the S&P500 closing in the lower half of the monthly range at 4953, resulting in a neutral to bearish outlook. Although a downside follow-through in May is likely, analysts emphasize the need to view it in the context of the overall bullish bias for new highs that was highlighted in previous articles. This suggests that while there is no strong short set-up, a further drop in prices could pave the way for a potential buying opportunity.

Furthermore, analysts note similarities between the recent monthly pattern and the one observed from June to August last year, albeit with a slightly weaker close in April. This similarity indicates the possibility of a lower trading trend in May, similar to what was experienced in September 2023.

Key resistance levels to watch for are at 5168 and the previous high of 5264.85, while 4953 stands as minor support. Additional significant levels include 4853 and 4818 if the price continues to trend downward.

Technically, April is identified as bar 6 of a potential 9 in an upward Demark exhaustion count, further illustrating the likelihood of a reversal. However, the market's behavior against the weak low at 4953 remains a red flag, and some analysts express the desire to witness a stronger bottom formation before concluding that the market has already hit its low point.

The 20-week moving average (MA) has provided support for the market for the third consecutive week, indicating a higher low, higher high, and higher close on the weekly bar. However, it is important to note that these positive actions took place within the larger range formed in the week of April 15. To negate the bearish bias, the market needs a close above 5168, which would indicate a potential shift in sentiment.

Looking ahead, the S&P500 faces important resistance levels at 5168-5174 and 5264. In case of a breakdown, support can be found at the 4918-4920 range, followed by 4845 and 4818.

The recent price action has been characterized by a choppy correction, and no Demark exhaustion signal has significantly progressed. However, if the current rally succeeds in breaking the 50-day moving average, it may force short positions to capitulate.

In terms of market drivers, the Federal Reserve has remained unconcerned with inflation and has exhibited a relatively dovish stance. Cooler inflation readings or weak employment data in the future could result in three rate cuts, starting as early as July or September of this year. These expectations have influenced the market, with a 28 basis point easing already priced in before the FOMC meeting.

Looking at the upcoming data calendar, next week is expected to be quiet, with only Unemployment Claims on Thursday and some bond auctions scheduled. With earnings season winding down, the market will keep an eye on Nvidia's earnings report on May 22nd.

In conclusion, the S&P500 is navigating through a complex correction phase, facing mixed signals and varying market drivers. While weaker economic data has been balanced by higher expectations of rate cuts, calling each swing in this phase presents a challenge. However, the end of this week suggests there are good odds of a move higher in the coming week. This could result in a squeeze of short positions above the 50-day MA, with an initial target of 5168-5174. However, analysts advise caution as they anticipate further downside at some point in Q2, with a re-test of the 4818 level considered likely.