Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Terence Gabriel. Reach him on Messenger to share your thoughts on market moves: terence.gabriel.tr.com@reuters.net
S&P 500: TESTS A WALL, TURNS TIPSY (0915 EDT/1315 GMT)
Like the Dow Jones Industrial Average .DJI , the S&P 500 .SPX is seeing double on the charts. Indeed, the SPX probed a resistance zone earlier this week and has since stumbled. (Click on chart below)
On Monday and Tuesday, the SPX probed the 76.4%/78.6% Fibonacci retracement zone of its May/June decline (at 2,900.95/2,905.91). The index was able to reach intraday highs of 2,904.77 and 2,910.61 before closing back under the zone.
Now the SPX is at risk for a 3rd straight down day, something it hasn't seen since early May. Meanwhile, daily momentum is waning as the RSI is rolling under the 70.00 overbought threshold.
Of note, in March of last year, the SPX stalled at the 76.4%/78.6% Fibonacci retracement zone of its January/February 2018 decline. The daily RSI also failed to manifest enough strength to move into overbought territory. From there, the SPX collapsed to test its February low.
However, if the S&P 500 is forming a large expanding triangle from its early 2018 high, it can now right itself after just a modest pullback. Ultimately, the SPX can advance above its 2,954.13 record high and attack the resistance line across its 2018 tops (now about 3,015) before risk for a more serious reversal may then build.
Support is at the 50-day moving average (2,873.18 Wednesday close) ahead of retracements at 2,841 and 2,819. Coming under these levels, however, can suggest risk for greater weakness.
(Terence Gabriel)
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