S&P 500: Lots of Support and Not Much Resistance?
The S&P 500 continues to shuffle sideways as a new quarter begins. However, there could be indications of positive forces gaining dominance.
The first pattern on today’s chart is the falling trendline along the highs of August and February. Will traders feel more bullish if prices break this resistance?
Second, while there may not be much resistance above, there could be considerable support below. Last week, for example, prices held the March 6 high around 4079. Below that is the March 22 high of 4039.5.
Another level is the 50-day simple moving average (SMA) around 4029.
Speaking of the 50-day SMA, notice how it’s above the 100-day SMA in gray. The 100-day SMA, in turn, is above the 200-day SMA in green. That sequence of faster SMAs above the slower may suggest the longer-term trend has grown more positive.
Next, the weekly chart below shows a long-term price channel (based on the 2011 low and the 2014 high). SPX tested and held this channel in October and has remained above it since.
You also have the falling trendline from last year’s bear market. Notice how prices broke above it in January and have remained there since. This may suggest 2022’s decline was nothing more than a normal fluctuation with a longer-term uptrend that’s still in effect.
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Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the falling trendline along the highs of August and February. Will traders feel more bullish if prices break this resistance?
Second, while there may not be much resistance above, there could be considerable support below. Last week, for example, prices held the March 6 high around 4079. Below that is the March 22 high of 4039.5.
Another level is the 50-day simple moving average (SMA) around 4029.
Speaking of the 50-day SMA, notice how it’s above the 100-day SMA in gray. The 100-day SMA, in turn, is above the 200-day SMA in green. That sequence of faster SMAs above the slower may suggest the longer-term trend has grown more positive.
Next, the weekly chart below shows a long-term price channel (based on the 2011 low and the 2014 high). SPX tested and held this channel in October and has remained above it since.
You also have the falling trendline from last year’s bear market. Notice how prices broke above it in January and have remained there since. This may suggest 2022’s decline was nothing more than a normal fluctuation with a longer-term uptrend that’s still in effect.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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