Low volatility, high stakes: S&P 500 faces pivotal week
SPY•Resistance and support levels to watch this week
Based on futures gains, the S&P 500 is set to test resistance at its 20-day moving average near 7,490. A close above that level could signal an upside breakout and put fresh record highs, and potentially the 8,000 mark, back into focus.
On the downside, a break below the July 26 low of 7,376 could revive selling pressure. Support sits at 7,294.18 and 7,237.85, while the 7,000 area — reinforced by the rising 200-day moving average just above it — could act as a magnet for prices.
S&P 500 futures rise as markets eye key catalysts
Wall Street stock futures are higher on Monday after the U.S. and Iran announced a pause in hostilities over the weekend, sending oil prices sharply lower. The move comes ahead of a packed week featuring corporate earnings, key economic data and the Federal Open Market Committee policy decision on Wednesday.
Ahead of the open, E-mini S&P 500 futures are up nearly 1%, pointing to a strong start for the benchmark index.
Volatility stays compressed despite the index going nowhere
Even so, the S&P 500 index has gone essentially nowhere in recent months. Friday's close at 7,411.98 was little changed from its 7,412.84 finish on May 11 and left the index 2.6% below its June 2 record close of 7,609.78.
The prolonged sideways trading has also crushed volatility. The S&P 500's daily Bollinger Bandwidth ended Friday at its lowest level since March 5, signaling unusually compressed price action. While that doesn't indicate direction, it often precedes a larger move.
A reminder came after March 5, when the index dropped as much as 7.5% over the following 17 trading sessions. With several major catalysts on tap this week, traders are bracing for another significant move.
