The S&P 500 closed at 3,340 after defending the 50-SMA on the daily chart. The bounce was notable, from 3,310 to 3,369 and bulls are now hoping to see a continuation move from this bounce. The last candlestick is fairly close to a bullish reversal hammer, however, bulls needed a bit more strength.
The last low of 3,310 is the new clear support, however, there is another strong support level at 3,200 formed on July 24 and retested almost one week later. As for resistance, bulls will be facing the last two highs at around 3,424 and then the 10-SMA at 3,440. Above the 10-SMA, the path is clear towards 3,588.
S&P 500 Analysis: 4-Hour Chart
On the 4-hour chart, bears were able to set a downtrend after hitting a new lower high at 3,425 and a lower low at 3,310. The 10-SMA crossed bearishly with the 50-SMA and both will act as resistance levels in the short-term. The 100-SMA at 3,321 is now acting as a strong support level.
If we have a weak open today, the S&P 500 could slip below 3,310 and 3,300 into the 3,300-3,200 area of support. A strong open would boost the index towards 3,400. The RSI is quite low on the 4-hour chart which is usually a good indicator of an upcoming bounce.
It seems that stocks are already rising this morning following the last dip. However, it’s important to note that they are all facing stiff resistance levels. The dollar bounce could be nearly over, giving stocks a chance to recover entirely. The recent Brexit negotiations are closely being monitored by traders.
The S&P 500 did close positively on Friday as 7/11 sectors of the industrial technology closed higher. The Dow Jones also soared on Friday, but the NASDAQ Composite had a slight decline.