The S&P 500 Could Be Holding a Key Level for SP:SPX by TradeStation

Many chart watchers are focused on the S&P 500’s pre-Covid peak around 3393 as potential target for the current bear market. However, the index might have held a different level from another key moment in its history.

This chart highlights the 3646, which was the intraday high on November 9, 2020. In case you forgot, that was the day stocks broke out to new record highs on news of Pfizer’s successful creation of a coronavirus vaccine.

SPX probed the level by as much as 13 points on December 11, 2020, but closed above it. The result was a monthly high and monthly low around the same price. The index breeched that line by a similar amount last week but quickly rebounded. Is the old support still valid?

Second, consider the descending parallel channel in place since late March. It may suggest that a bounce is needed — even if new lows are still coming.

Third, the advance/decline line didn’t confirm the most recent low.

Finally, 10- and 30-year Treasury yields are back below their 2018 highs and oil is sliding. That may suggest most of the inflationary news is priced in — at least for the time being.

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