The monthly chart in September recorded a negative outside month, suggesting the potential for an SPX top. However, the weekly and daily SPX charts show a battle developing between the SPX bulls and bears. Enclosed below are technical commentaries of the near-to-medium-term technical outlooks for SPX.
Medium-term Technical Outlook (Weekly Chart)
A successful test of the 10-wk ma (4,287.50) is technically constructive, signaling the potential for an SPX bottom.
However, there remains formidable resistance at 4,449.5-4,457, coinciding with the 10-wk ma (4,449.5), the extension of the Mar/Apr 2021 uptrend breakdown (4,451), and 9/20/21 and 9/27/21 weekly highs (4,457/4,465).
A breakout above this pivotal resistance by the end of the week confirms a positive outside week, reaffirming the 10/4/21 weekly low (4,278.94) as a crucial low. A breakout here also signals an SPX recovery toward 4,545.85 (9/2/21 all-time high), and above this to 4,638 (top of the Mar/Apr 2021 uptrend channel.
On the other hand, convincing violation of 4,278-4,287.50 (10/4/21 low and 30-wk ma) warns of a decline to 4,232-4,233 (7/19/21 weekly low and 38.2% retracement from Mar 2021-Sep 2021 rally), and below this to 4,145.60 (50% retracement) and then 4,037.5-4,057 (61.8% retracement and 5/10/21 weekly low).
Short-term Technical Outlook (Daily Chart)
It is positive that SPX has rebounded from key support at 4,244-4,301 (50-61.8% retracement from 5/12/21 to 9/2/21 rally). It is also a near-term bullish technical development that SPX generated a gap-up today (10/7/21).
The key challenge for SPX is to surge above the 9/28/21 gap-down (4,419.5-4,436) and the 50-day ma (4,438.6). There is also formidable secondary resistance at 4,465-4,487 (left/right shoulders and the extension of the Apr/May 2021 uptrend channel).
A breakout here signals an SPX recovery to 4,545.85 (9/2/21 all-time high) and above this to 4,595 (Nov 2020 V-pattern breakout target) and 4,810-4,859 (top of the Apr/May 2021 uptrend channel and the head/shoulders breakout target).
Key initial support rises to 4,365.5-4,384 (10/7/21 gap-up), and below this to 4,279 (10/4/21 low), and 4,233-4,244 (7/19/21 low and 61.8% retracement). A breakdown here warns of a deeper correction to 4,151-4,168 (Jun 2021 lows and the 200-day ma) and 4,057-4,061 (May 2021 lows).