S&P 500 Closing in on Resistance

2023년 7월 16일

After chalking up a fourth consecutive month in the green (June +6.5%), aided by the Relative Strength Index (RSI) on the monthly timeframe rebounding from support between 40.00 and 50.00 (common in strong uptrends), the S&P 500 is fast approaching the all-time high at 4,818 set at the beginning of 2022.

Price action on the weekly timeframe held firm north of 4,325 (now support) and, thanks to last week’s +2.4% rally, is within a stone’s throw from channel resistance drawn from the high of 4,100, followed by resistance at 4,595. Also of technical relevance, the weekly RSI draws near overbought territory (likely to strike overbought once/if price action tests the aforementioned channel resistance).

For those who read the latest Pattern Pulse, you may recall that the Research Team noted the following on the S&P 500 (italics):

Acknowledging the scope to navigate higher on the monthly and weekly timeframes, price action on the daily timeframe recently tested the courage of resistance at 4,473 (and likely filled buy-stops). It could eventually open the door for breakout buying towards a daily Fibonacci Cluster at 4,537.

As evident from the daily timeframe, we have seen price breakout north of 4,473 (now marked support), with the index finishing the week within striking distance of the Fibonacci Cluster, set nearby the weekly timeframe’s channel resistance. Consequent to this, despite the monthly, weekly and daily timeframes exhibiting strong uptrends, buyers could experience some opposition at 4,537ish this week. Alternatively, a breakout beyond the noted base paves the way north for further outperformance towards weekly resistance at 4,595.