LIVE MARKETS-S&P 500 index traders tense given trend line, time projection

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S&P 500 INDEX TRADERS TENSE GIVEN TREND LINE, TIME PROJECTION

From its February 19 then record close, the S&P 500 index .SPX endured a 19% collapse over a Fibonacci 34 trading day (td) period into its April 8 closing low.

Now, in the wake of a 24% surge over a Fibonacci 55 td run, the benchmark index scored fresh record highs on Friday.

Meanwhile, traders are on alert, given that the SPX is fast approaching a key long-term resistance line and that a milestone utilizing a Fibonacci time projection from the 2022 bear-market low is due in late July:

Indeed, traders are eyeing the long-term resistance line from the 1929 high, which is now around 6,250 on a monthly basis, and will ascend to around 6,280 in July.

This line presents a major hurdle given that it capped strength in the December-February period. It's only about 1.2% above Friday's 6,173.07 finish. In July, it will be around 1.7% above Friday's finish.

Additionally, traders who utilize time-based methodologies are also on guard.

Since the market's October 2022 trough, and using trend-based Fibonacci time projections, the S&P 500 index has seen some spooky turns around the weeks that suggested the potential for a reversal of its most recent trend.

The 2022 bear market occurred over a 40 weekly-bar decline. The week beginning Monday, July 21, will mark the 3.618x time projection, or 145 bars forward from the week of the market's bottom in October 2022.

The SPX is nearing this time projection just as it's making record highs and challenging the long-term resistance line.

Thus, tension is building as traders look to see how the SPX now handles the resistance line, and whether the echo from the end of the last bear market still resonates.

(Terence Gabriel)

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