LIVE MARKETS-S&P 500 index's moving average wall trumps win streak

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S&P 500 INDEX'S MOVING AVERAGE WALL TRUMPS WIN STREAK

After essentially reaching a wall of long-term moving averages on Friday, the S&P 500 index .SPX, on Monday, ended a nine-day win streak, its longest since 2004:

On Friday the SPX hit an intraday high of 5,700.70. This put it just shy of the Fibonacci-based 233-day moving average (DMA), which was about 5,705, as well as the closely watched 200-DMA, which was just shy of 5,750.

Of note, the mid-to-late-March bounce stalled just above the 200-DMA, and the late-March-early-April snap higher stalled around the 233-DMA.

The SPX ended Monday down 0.64% at 5,650.38 for its first loss in 10 sessions.

With e-mini S&P 500 futures EScv1 suggesting about a 50 point, or 0.8%, drop at Tuesday's open, the S&P 500 index's May 1 gap, which requires a fall to 5,581.84 for a fill, may be a magnet.

That said, bulls will want to see the descending 50-DMA, which should be just below 5,570 on Tuesday, and then around 5,560 on Wednesday with the results of the latest FOMC policy meeting, contain weakness on a closing basis.

A resumption of the advance, which sees the SPX reclaim the two long-term moving averages, and then clear the 5,786.95 March 25 high, can refocus the index on its record highs.

In the event the 50-DMA is unable to contain weakness, the next support is at the April 30 low at 5,433.24, and there is a weekly Gann Line which is now around 5,425.

(Terence Gabriel)

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