The S&P 500 is showing signs of stalling as expected at the beginning of our flagged resistance/objective, seen stating at 2855 and stretching up to 2934 – the 61.8% retracement of the Q1 collapse. Although the market fell yesterday, volume was actually muted and this suggests that even if our view is correct that strength is corrective and we should be looking for signs of a top, this process may take a while. Notwithstanding this though we look for a retest of gap support at 2763/62, below which should see a test of the low from Monday and accelerated uptrend at 2726/21. We need to see a move below here though to confirm a near-term top, with support then seen next at the 13-day average at 2689.
Immediate resistance moves to 2802/05, above which can see a move back to 2833, potentially a retest of 2852/55. Above here can see strength extend to 2883, potentially 2934, but with our “ideal” road map remains for the market to set a fresh top in this zone. It is worth noting though a move to the 200-day average at 3014 would still be consistent with a corrective move higher, although this would be the maximum we would allow for.
The recovery is showing signs of failure as expected at the beginning of tough resistance seen starting at 2855 and stretching up to 2934 – the 61.8% retracement of the Q1 collapse – and we continue to look for evidence of a top. Key near-term support is at 2726/21.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.