LIVE MARKETS-S&P 500 index ripe for more spirited action

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S&P 500 INDEX RIPE FOR MORE SPIRITED ACTION

The S&P 500 index .SPX kicked off June with a higher close on Monday. This after it just posted in May its biggest monthly gain since November 2023, and its best May since 1990.

That said, over the past several weeks or so, the benchmark index appears to be consolidating the powerful rise off its early April lows:

Over the last 11 trading days, the SPX has gained just 0.32%, putting it down 3.39% from its February 19 record close.

Of note, with this recent sideways action, historical volatility on a shorter-term basis is now especially compressed. In fact, last Thursday, hourly Bollinger Band width hit its lowest level since February 20, which was just one trading day after the S&P 500's record highs, and just as a major decline had kicked off.

Thus, on a shorter-term basis this week, amid simmering tariff tensions, geopolitical stress, and a boatload of economic data leading up to Friday's non-farm payroll release, the S&P 500 index appears ripe for much more spirited action, one way or the other.

On a break above the May 19 high at 5,968.61, the SPX can take aim at its highs in the 6,099-6,147 area. The long-term resistance line from the 1929 high resides around 6,250 in June. This line capped strength in the December-February time frame.

On weakness, the closely followed 200-day moving average (DMA), as well as the Fibonacci-based 233-DMA, ended Monday in the 5,787-5,743 area.

Bulls looked for these two longer-term moving averages to provide fertile ground for a resumption of the advance. Indeed, the May 23 low, at 5,767.41, was inside the zone defined by these two lines.

The large May 12 gap requires a fall to 5,720.10 to be filled on a weekly basis, and the rising 50-DMA ended Monday at 5,610.

(Terence Gabriel)

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