LIVE MARKETS-S&P 500 poised to challenge its highs, 7,000 milestone

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S&P 500 POISED TO CHALLENGE ITS HIGHS, 7,000 MILESTONE

The S&P 500 advanced for a fourth straight session on Monday, as investors geared up for a slew of mega-cap earnings and a Federal Reserve update on interest rate policy later this week.

With Monday's strength, the S&P 500 ended at 6,950.23, which is down just 0.39% from its 6,977.27 January 12 record close and down just 0.52% from its 6,986.33 January 12 record intraday high. Additionally, the benchmark index is just 0.7% below the 7,000 psychological milestone.

With e-mini S&P 500 futures EScv1 trading up around 0.2% in premarket on Tuesday, the benchmark index would appear poised to challenge these levels.

Meanwhile, with just four trading days left in January, the S&P 500 is so far up 1.53% for the month.

Nine of its 11 sectors are higher so far this month, with Materials .SPLRCM and Energy .SPNY, both up more than 10%, posting the biggest gains. Only Tech .SPLRCT and Financials .SPSY are lower.

With this, the Equal-Weighted S&P 500 .SPXEW is outperforming the cap-weighted index so far this month, and S&P 500 Value .IVX is outperforming Growth .IGX.

In the event the SPX can push to new highs and overwhelm the 7,000 level, the next resistance will be a weekly Gann Line, which now resides around 7,080.

This Gann Line capped strength in late 2024 and early 2025, ahead of the SPX's near-20% collapse on a closing basis into its April trough.

More recently, in late October and early November of last year, the SPX was able to probe slightly above this barrier. However, the index failed to score a weekly close above it, before promptly dropping a little over 5% into its November 20 closing low.

Pushes toward this line in early December and late December led to quick 2.6% and 1.3% drops into the December 17 and December 31 closing lows. And another probe toward it earlier this month led to another 2.6% decline into the January 20 closing low.

On the downside, the SPX's 50-day moving average (DMA) ended Monday at 6,840. The January 20 intraday low was at 6,789.05 and the 100-DMA ended Monday at 6,763.

Of note, since May 12 of last year, the S&P 500 has seen just one minor closing violation of the 100-DMA, which was on November 20.

(Terence Gabriel)

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