S&P 500 Update: Navigating The Choppy Price Action

Mark Arbeter

The choppy price action on the S&P 500 (INDEXSP:.INX) continues… Prices reversed higher today following a rough week that saw the index close on its lows.

So is a bottom near?

Here are a few things that I am watching:

1.  MACD / RSI / 50 DMA

A couple of bearish developments occurred last week: the daily MACD moved into negative territory while the 14-day RSI fell below 50. As well, prices slipped below the 50-day moving average. These momentum characteristics tend to coincide with the “meat” of a decline.  The rally today may test the bears fortitude.  Stay tuned to these developments this week…

2.  Slope Resets

Notice how many times the slope has reset during this pause/pullback. This is very typical after a strong move that becomes unsustainable from a slope perspective.

3.  Buy Levels (support)

I have been recommending a small buy (an increase in equities to those that are underweight) at the 50-day average, followed by a larger buy down in the 2,280 to 2,300 zone. The next attractive buy area would be the 2,230 region (200-day average/chart and FIBO support).

Once the pullback ends, the upside reversal will likely be sharp so I find it easier to buy on the way down at specific and laid out support areas.

S&P 500 Daily Chart

Feel free to reach out to me at arbetermark@gmail.com for inquiries about my newsletter “On The Mark”.  Thanks for reading.


Twitter:  @MarkArbeter

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.