SPX500 Threatens Breakout at Monthly High

S&P 500 Technical Price Outlook: Short-term Trade Levels

• S&P 500 technical trade level update – Daily & Intraday Charts
• SPX500 rallies into November highs- risk for price inflection into key resistance just higher
• SPX Resistance 3906/08, 3958, 4007 (key) – Support ~3760s, 3705, 3637/69 (critical)

The S&P 500 is poised to mark the largest single-day advance since March 2020 (a month after the yearly-low was registered) with the index surging more than 4% in early US Trade today. The advance is now testing the monthly opening-range with key resistance objectives eyed just higher- is a larger breakout underway? These are the targets and invalidation levels that matter on the SPX500 technical price charts into the close of the week. Review my latest Strategy Webinar for an in-depth breakdown of this SPX500 setup and more.

S&P 500 Price Chart – SPX500 Daily

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Technical Outlook: The S&P 500 is attempting to break above confluent resistance today at 3906/08– a region defined by the May low-day close and the 50% retracement of the August decline. A breach above this threshold is needed to validate a breakout of the objective November opening-range. Watch the close today.

S&P 500 Price Chart – SPX500 240min

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Notes: A closer look at SPX500 price action shows the index trading within the confines an ascending pitchfork formation (I’ve modified the slope on this recent advance). The index is attempting to breach the monthly highs today with the upper parallel converging on the 61.8% Fibonacci extension of the October advance just higher at 3958. Ultimately, a breach above the 61.8% retracement of the August decline at 4007 is needed to validate a larger trend reversal in the SPX towards the February / March lows / 100% extension at 4105/40– look for a larger reaction there IF reached.

Initial support now rests with the October trendline (red) backed by the monthly range lows around 3700. Near-term bullish invalidation now raised to 3637/69– a region defined by the June low, the 61.8% retracement and the yearly low- day close. A break / close below this threshold would threaten another bout of accelerated losses and resumption of the broader downtrend towards key support at the yearly lows around the 3500.

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Bottom line: The S&P 500 is approaching key resistance targets just higher and I’m on the lookout for possible price infection. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards the upper parallel- losses should be limited to the October trendline IF price is heading higher on this stretch with a close above 4007 needed keep the immediate long-bias viable in the days ahead. Review my latest S&P 500 Weekly Technical Forecast for a closer look at the longer-term SPX 500 technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

S&P 500 Trader Sentiment – US500 Price Chart

• A summary of IG Client Sentiment shows traders are net-long the S&P 500- the ratio stands at +1.58 (61.17% of traders are long) – typically a bearish reading
• Long positions are 10.33% higher than yesterday and 3.91% higher from last week
• Short positions are 10.33% lower than yesterday and 13.08% lower from last week
• We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests S&P 500 prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger S&P 500-bearish contrarian trading bias from a sentiment standpoint.

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-Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex