The S&P 500 took a breather after making fresh record highs earlier this month.
But the U.S. stock index is now trading near a support zone, which could allow the bulls to jump in a broader trend.
What do you think of the asset’s daily chart?
S&P 500 Index (SP500) Daily Chart by TradingView
The S&P 500 has been easing off its recent high near 6,150, with investor caution setting in ahead of Nvidia’s earnings and some underwhelming economic data fueling hopes for quicker Fed rate cuts.
This looks like a natural pullback within a broader uptrend, but the next move could go either way. Right now, the index is hovering around 5,975, just under that key 6,000 level that traders seem to love to watch.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. stock market, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Take note that the 100 SMA is sitting near 5,850 and has acted like a solid “floor” for the market since November 2023. Every time the index has tested this line over the past year, it’s bounced back instead of breaking through.
This time, the 100 SMA is also sitting close to the key 6,000 mark and the Pivot Point (5,981) level in the daily time frame.
For bulls, keep an eye out for long wicks below the 100 SMA, bullish candlesticks, or steady trading above 6,000. Those could signal fresh buying demand, potentially pushing the index back to its 6,150 highs or maybe even its fresh record highs.
On the flip side, if red candlesticks start showing up or the index stays below the 100 SMA, we could see a deeper pullback. The first stop might be the 5,850 zone, but a slide toward 5,750, closer to the 200 SMA support, wouldn’t be out of the question.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
