S&P 500 Going Sideways - Are We Getting Close to Breaking Out?
June 23, 2022 (Investorideas.com Newswire) There's still no clear direction, as stock prices continue to fluctuate following their mid-June sell-off. So is this a bottoming pattern?
The S&P 500 index lost 0.13% on Wednesday, as it continued to fluctuate below the 3,800 level. Earlier in the week it retraced last week's Wednesday's-Friday's decline to new medium-term low of 3,636.87. On Friday the market was 1,181.75 points or 24.5% below its Jan. 4 record high of 4,818.62. And on Tuesday it bounced up to around 3,780. Yesterday buyers gave up at 3,800 level though.
There's still a lot of uncertainty and worries about inflation data, tightening Fed's monetary policy and the Russia-Ukraine conflict. Today we will get another Fed Chair Powell's Testimony at 10:00 a.m. This morning the S&P 500 index will likely open 0.5% higher, following an overnight retreat from the 3,800 level.
The nearest important resistance level is at around 3,800-3,850, marked by the previous support level. The resistance level is also at 3,900. On the other hand, the support level is at 3,650-3,700. The S&P 500 index trades within an over week-long consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Futures Contract Remains Below the 3,800 Level
Let's take a look at the hourly chart of the S&P 500 futures contract. Last week it broke below the previous consolidation. The market reached new medium-term low on Friday, as it tumbled below the 3,700 level. This morning it is fluctuating slightly below the short-term resistance level of 3,800. (chart by courtesy of http://tradingview.com):
The S&P 500 index will likely open 0.5% higher this morning and we may see another attempt at breaking above the 3,800 level. For now, it looks like a consolidation within a downtrend or a bottoming pattern.
Here's the breakdown:
- The S&P 500 index continues to fluctuate within a consolidation following its mid-June decline
- We may see further attempts at breaking above short-term local highs.
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