LIVE MARKETS-S&P 500 index tests trend line, takes another tumble

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S&P 500 INDEX TESTS TREND LINE, TAKES ANOTHER TUMBLE

Since the end of November, the S&P 500 index .SPX has been struggling to make progress. This as a long-term trend line continues to cap strength:

Coming into the last week of February, the benchmark index's rolling three-month change stands at -0.32%. This has it on pace for its first negative rolling three-month change since October 2023.

Meanwhile, for the third month in a row, the SPX has flirted with a significant hurdle in the form of a long-term resistance line from its 1929 high, which resides around 6,150 this month.

Of note, with this line around 6,100 in December, the S&P 500 hit an intraday record high of 6,099.97 on December 6. The index then slid more than 5% into its January 13 intraday low.

In January, with this line around 6,125, the SPX put in an intraday record high of 6,128.18 on January 24. It then fell more than 3% into its February 3 low.

On February 19, with this line now around 6,150, the SPX hit an intraday record high of 6,147.43. On Friday, the index ended at 6,013.13, which put it down more than 2% from its intraday record high in just two trading days.

With e-mini S&P 500 futures EScv1 bouncing around 30 points, or more than 0.5%, ahead of Monday's open, the SPX appears poised to snapback.

However, the index will need to reclaim its 20-DMA, which should be around 6,065 on Monday, to suggest it will make another attempt to challenge the resistance line.

Initial support, which held amid Friday's tumble, resides in the 6,005-5,990 area. This includes the 50-day moving average (DMA), the February 12 low (6,003), and the 10-week moving average.

Additional levels are in the 5,980-5,970 area, which include the support line from the October 2023 low trough, and the rising 20-WMA.

The February 3 low was at 5,923.93, while the January 13 trough was at 5,773.31. The rising 40-week moving average should be around 5,750 this week.

(Terence Gabriel)

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