Search

SPX Intra-day and Daily Charts

The intermediate-to-long term trend on the S&P 500 Index remains bullish. We still recommend investors respect the dominant and prevailing trend. However, March is turning into a volatile period that will likely determine the near-term trends of SPX. Traders will need to be extra careful as the market will undergo pivotal technical tests. The outcome of these tests in the next few days/weeks will likely determine the near-term trend of SPX and influence the direction of many of the larger-cap U.S. stocks.


Attached below are two technical charts. The first is an intra-day chart of SPX over the past 1-plus month. The second chart is a daily chart of SPX spanning the past six months.


SPX intraday chart


The 1-plus intra-day chart shows the sharp 1/29/21-2/16/21 rally or +256.31 points (+6.94%) led to an overbought condition. Although higher prices are still possible to 4,207, the recent -5.75% pullback appears to be high-level consolidation between 3,789.54-3,810.81. However, the technical breakdown below 3,789.54 (1/26/21 low) warns of the next decline to 3,694.12 (1/29/21 low), and below this to 3,629 (downside target). Violation here creates a lower-low pattern and warns of a deeper correction of -256.31 to 3,438.


On the upside, the initial trading resistance is 3,789.5-3,811 (3/4/21 breakdown). A breakout here can lead to the next SPX technical rally to 3,914.5-3,930 (2/19, 2/24, and 3/1/21 highs) and above this 3,950.43 (2/16/21 all-time high). A breakout above 3,950.43 confirms a record high and renders the next sustainable SPX rally toward 4,207.


SPX 6-month daily chart


A potential head and shoulders top pattern warns of near-term SPX volatility. The head is 3,950,43 (2/16/21 all-time high). The left shoulder is 3,870 (1/26/21 high), the right shoulder is 3,928.65 (2/24/21). Violation neckline support below 3,694 (1/29/21 low) suggests -256.31 or downside to 3,438. On the other hand, the ability to find initial support at 3,677-3,694 signals a technical rebound toward 3,819-3,843.67 (50-day ma and 3/4/21 intra-day high). A breakout here renders the next technical rally to the left and right shoulders (3,870.90-3,928.65), and above this to 3,950.43 (the head and 2/16/21 all-time high). A breakout above 3,950.43 confirms a record high and suggests +256 or an SPX target to 4,206.


Key technical levels for SPX based on the 6-month chart are:

Support 1 = 3,677-3,694 (1/29/21 low and neckline support, and 38.2% retracement)

Support 2 = 3,588-3,592 (50% retracement and Sep 2020 high)

Support 3 = 3,467-3,508 (61.8% retracement, 200-day ma, and h/s top breakdown)

Support 4 = 3,279-3,318 (38.2% retracement from Mar 2020-Feb 2021 rally and Sep 2020 uptrend)


Resistance 1 = 3,819-3,843.67 (50-day ma and 3/4/21 high)

Resistance 2 = 3,871 (1/26/21 high and left shoulder)

Resistance 3 = 3,929-3,950.43 (2/16 and 2/24/21 all-time highs)

Resistance 4 = 4,206 (head/shoulders top breakout target)



Source: Courtesy of StockCharts.com

Source: Courtesy of StockCharts.com

109 views0 comments

Recent Posts

See All

Let's Talk Turkey

Now let us talk turkey. The origin of the phrase came from colonial times, specifically from the day-to-day bargaining of price over wild turkeys between the colonists and Indians. Today, the phrase t