S&P 500 technical forecast: SPX rally faces first major test

S&P 500 technical forecast: SPX weekly trade levels

S&P 500 set to snap three-week advance off key support at the yearly open
SPX500 rally vulnerable below 2023 opening-range high- constructive above 3844
SPX resistance 4134/37 (key), 4312, 4415– support ~3972, 3844, 3760 (critical)

The S&P 500 is poised to snap a three-week rally with SPX500 responding to technical resistance this week. While the medium-term outlook remains constructive, the advance may be vulnerable here as the bulls test the yearly opening-range highs. These are the updated targets and invalidation levels that matter on the SPX500 weekly technical chart this month.

Discuss this SPX setup and more in the Weekly Strategy Webinars on Monday’s at 8:30am EST.

S&P 500 Price Chart – SPX Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; SPX500 on TradingView

Technical Outlook: In my February S&P 500 technical forecast we noted that the, “sell-off is approaching key support levels into the March open. From at trading standpoint, look to reduce short-exposure / lower protective stops on a drop towards the yearly open.” The index briefly registered an intraday low at 3807 but failed to mark a daily close below 3844. A three-week rally off that mark has extended more than 8.8% off the lows with the SPX500 now testing resistance at the yearly high-week close / March 2022 swing low at 4134/37- looking for a reaction off this pivot zone.

Initial weekly support rests with the 52-week moving average (currently ~3972) backed by the objective yearly open at 3844 and the 61.8% Fibonacci retracement / December low at 3760/63- a break / weekly close below this threshold is needed to mark resumption of the broader downtrend towards the 2021 lows at 3664 and beyond.

A topside breach / close above the yearly opening-range highs at 4196 is needed to validate a larger breakout towards uptrend resistance at the 61.8% retracement of the 2022 range (4312) and the 100% extension of the October rally at 4415- both levels of interest for possible topside exhaustion IF reached.

Bottom line: The S&P 500 has rallied back into resistance near the yearly range-highs- risk for possible exhaustion / price inflection early in the month. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops – losses should be limited to the yearly moving average IF price is heading higher on this stretch. Ultimately a close below 3760 would be terminal with such a scenario threatening another accelerated decline towards fresh yearly lows.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor