The S&P 500 Could Be Holding a Key Level
Many chart watchers are focused on the S&P 500’s pre-Covid peak around 3393 as potential target for the current bear market. However, the index might have held a different level from another key moment in its history.
This chart highlights the 3646, which was the intraday high on November 9, 2020. In case you forgot, that was the day stocks broke out to new record highs on news of Pfizer’s successful creation of a coronavirus vaccine.
SPX probed the level by as much as 13 points on December 11, 2020, but closed above it. The result was a monthly high and monthly low around the same price. The index breeched that line by a similar amount last week but quickly rebounded. Is the old support still valid?
Second, consider the descending parallel channel in place since late March. It may suggest that a bounce is needed -- even if new lows are still coming.
Third, the advance/decline line didn’t confirm the most recent low.
Finally, 10- and 30-year Treasury yields are back below their 2018 highs and oil is sliding. That may suggest most of the inflationary news is priced in -- at least for the time being.
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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.
This chart highlights the 3646, which was the intraday high on November 9, 2020. In case you forgot, that was the day stocks broke out to new record highs on news of Pfizer’s successful creation of a coronavirus vaccine.
SPX probed the level by as much as 13 points on December 11, 2020, but closed above it. The result was a monthly high and monthly low around the same price. The index breeched that line by a similar amount last week but quickly rebounded. Is the old support still valid?
Second, consider the descending parallel channel in place since late March. It may suggest that a bounce is needed -- even if new lows are still coming.
Third, the advance/decline line didn’t confirm the most recent low.
Finally, 10- and 30-year Treasury yields are back below their 2018 highs and oil is sliding. That may suggest most of the inflationary news is priced in -- at least for the time being.
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. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. 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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