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S&P 500 – Short-term Trading Levels & Considerations

S&P 500 – Short-term Trading Levels & Considerations

What’s inside:

  • S&P 500 holding up in record territory
  • Defined short-term trading levels to watch
  • Continuing to run with a generally bullish bias as long as support levels hold

Looking for a longer-term view on the S&P 500? Check out our quarterly forecasts.

The market has been quiet so far this week, with the S&P 500 treading water right around record levels. As we said yesterday, with volatility as low as it is it makes trading difficult, but not impossible. It needs to be accepted that volatility is low and in response to these market conditions we need to be more careful in picking our spots and lower expectations.

Last week the S&P broke out from a triangle we had penciled in on the hourly time-frame. It didn’t lead to a huge up-move, but on the initial thrust the formation led the market up towards the measured-move target at 2408 before reversing lower a few points shy. The past couple of sessions we have seen the S&P dip a little and hold support right around 2393. For a continuation-trade higher it will be key in the short-term for this level to hold, else we could see more weakness down into the 2080s.

Looking higher, a climb above 2304 is needed for a breakout, however; our interest doesn’t lie in trying to chase a breakout, especially in this low-vol environment. In the event of a breakout, a retracement and hold of support is the preferred approach for entering new longs.

Should the market fail to push higher and we see a clean break of 2393, we’ll have our eyes on the trend-line running up from the 4/24 gap-day low, and below there of even more interest is support around the 2080 mark. A clean break below 2080 will quickly bring a gap-fill scenario into play down to 2373. In the near-term, it looks unlikely we will see a fill of the French election-induced gap on 4/24. At some point this gap will get filled, but it may not be any time soon. We’ll touch on it should the market trade down into the gap, but it’s premature to discuss at this time.

S&P 500: Hourly

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Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---Written by Paul Robinson, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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