SPX 500's Technical Retreat: Support at 5,290?

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from overbought levels. There is now room for a pullback towards previous resistance turned support in the form of the previous record high from April around 5,290 before the market considers a run to another record high.

• R2 5679 – 16 July/Record high – Strong
  
• R1 5593 – 23 July high – Medium
  
• S1 5398 – 25 July low – Medium
  
• S2 5352 – 23 May high – Strong
  

US SPX 500 – fundamental overview

Though we have seen a healthy adjustment of investor expectations towards the amount of rate cuts in 2024, the market still hopes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid into dips and consistently pushing record highs. Still, if there is a sense the Fed will need to be more sensitive towards erring on the side of higher rates, it could invite a much bigger disruption to stocks.

Exclusive FX research from LMAX Group Market Strategist, Joel Kruger