Path to S&P 500 rally strewn with obstacles
SPY•The S&P 500 closed down more than 1% at 7,663.43 and faces nearby support levels between 7,604 and 7,631.77. A move above 7,770.40 could put record highs back in play, while a break above 7,844.52 could open a test of 8,000.
1. Support levels below
The S&P 500 closed down more than 1% on Thursday at 7,663.43, led by technology shares. Chart watchers will look to see whether it holds above the October 16 low of 7,631.77 and the October 1 low of 7,616.78. Below those levels, the rising 100-day moving average is near 7,604; the index has not closed below it since April 7.
2. Further downside markers
A close below the 100-day moving average would shift attention to the September 16 low of 7,507.77 and the 23.6% Fibonacci retracement at 7,484. The June-to-July trough lies around 7,237 to 7,313, a zone that also includes the rising 200-day moving average near 7,288. A retreat there would leave the index roughly 6.5% to 7.4% below its record closing high.
3. Resistance overhead
The 50-day moving average is near 7,703. A move above the October 21 high of 7,770.40 would put record highs back in play; a breakout above the October 6 intraday record of 7,844.52 could open the door to 8,000. The index is between support below and recent highs overhead, and a decisive move through either side would likely set the tone for the next period.
