S&P500 fell to the technical support level of 3000 last week. However, since then, it has rebounded.
Failing to regain the 3200 level that was last tested around 9th June, the index is drifting lower. As a result, the S&P500 is now consolidating within the 3200 and 3000 levels.
Friday’s price action saw a pullback that could see a move back to the lower support.
We anticipate this consolidation to continue in the near term. It sets the stage for a breakout from this range. The trend line is also breached, and last week’s price action suggests a pullback following this breakout.
Based on the trend line break, we could assume that the S&P500 might be heading lower.
This makes the 3000 level critical for the moment. If the technical support gives way, then we could expect a move lower to the 2735 level of support.
Expect some consolidation to happen around the 3000 level with the confluence of the 200-day moving average.