Can the S&P Continue to Bounce?

We hit a notable support level on Friday, as you know.

Technical Edge — 

• NYSE Breadth: 27% Upside Volume 

• Advance/Decline: 28% Advance 

• VIX: ~$21.75

Last week was messy in the markets, but clean on the charts. Does that make sense? First, 4000 held as support and gave us a bounce. A few days later on Friday we were looking at 3950, “where it should find — at the very least — temporary support.” 

It traded 3947.50 and bounced, closing near the 3975 level with 4000 back in play as of 8 a.m. ET. 

So what now? 

S&P 500 — ES 

Let’s talk about the bigger picture here for a second. The 4175-ish area held as resistance, despite several attempts to clear this zone. 

We’ve lost the 10-day and 21-day moving averages, but are holding some of the bigger MAs (like the 50-day and 200-day). We’ve also now retraced 61.8% of the move from the Dec. lows. 

So there are definitely some “concerns” on the chart, although after three straight down weeks and testing a major level, a short-term bounce could certainly be in the cards. 

Zooming In

As we take a closer look at the chart, 4020 to 4030 was a notable resistance level last week. I expect this area to be initial resistance if we see it. Above it and the 10-day ema could be in play. 

If the ES can’t hold 4000, ~3975 remains in play. If we somehow lose 3973 and can’t regain it, 3950 is back in play. 

SPY