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Fan Yang

S&P500 Gets Another Crack at Support but Holds

The equities market continues to be tentative. The "sell in May and go away" axiom could still hold true in 2018. The S&P500 index for example has been choppy, but has held above key support factors. It tested these support factors again during the 5/3 session.

SPX Daily Chart

(click to enlarge)

Key Support:
1) 200-day simple moving average (SMA).
2) Rising trendline support.
- Both of these support factors are holding so far. In fact they have been holding the last couple of times as well.
- This means, a close below 2580 could send the index falling to 2500 if now lower. 
- The daily RSI supports this bearish outlook as it has been tagging 30 and then holding under 60. This reflects maintenance of the bearish momentum.
- Price will have to push back above $2700 and the RSI back above 60 before we start sidelining the bearish scenario.

 

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