A bounce, not yet a breakthrough
SPY•Key resistance and support levels to watch
On the upside, the first key resistance zone sits between 7,610 and 7,621, where a weekly Gann line, the 50-day moving average and the June 2 high converge. Beyond that, traders will be watching the September 11 high at 7,677.02. A move above that level would be an early sign that the decline from the August peak is losing momentum.
On the downside, Wednesday's low remains a critical level. A break below 7,507.77, especially if confirmed by a close beneath the 100-day moving average, would increase the risk of a deeper selloff.
In that event, attention would shift to the June-July lows in the 7,237-7,314 area, around 6.2% to 7.4% below the record highs. Below that lies the rising 200-day moving average, which ended Wednesday near 7,175 and sits roughly 8% beneath the peaks.
For now, bulls can point to the successful defense of the 100-day moving average. The next challenge is reclaiming nearby resistance and building enough momentum to reverse the recent downtrend.
