S&P 500 Technical Update: Lower Support Levels in Focus

The price action in the equity markets over the past few days has been choppy, to say the least. The S&P 500 (SPX) is trading sharply lower today, and this comes on the heels of yesterday’s relief rally – a rally that had some traders feeling bullish again. So, now what? Well, as a firm believer in technical and intermarket analysis, I think active investors should be aware of key S&P 500 support levels.

That said, let’s turn to the charts to see what’s going on and what S&P 500 support levels to keep on your radar. The chart below offers a macro look at the S&P 500 move higher over the course of this year.

As you can see, the breakout above 1900 was very important to the latest advance higher and now stands as a critical support level. We can also see the uptrend line created from the April-August lows. This comes in around 1940. Lastly, note today’s break below the 38.2 Fibonacci retracement of the August to September rally (we’ll cover that within the context of the next chart).

S&P 500 Daily Chart – 2014

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s&p 500 technical support levels september 25


Zooming in on a 3 month chart allows us to look at some near-term technical support levels for traders. What stands out to me in the chart below, is that today’s price action broke the recent lows and has punctured the .382 Fibonacci retracement level, as well as entered the July 31st gap lower. A close below 1970 sets the index up for a potential test of the 61.8 Fibonacci support level around 1948, which is just above the aforementioned uptrend support in and around 1940.

Consecutive closes below 1940 would put 1900 in focus and set up a major bull-bear showdown. But that’s getting ahead of myself. There’s still a couple hours left to today’s market action… and anything can happen. Trade safe and keep an eye out for these S&P 500 support levels.

S&P 500 Daily Chart – 3 Months

s&p 500 fibonacci levels september 25 2014


Follow Andrew on Twitter:  @andrewnyquist

No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.