On Tuesday we gave a technical view of the S&P 500 futures using multiple scenarios ahead of FOMC; and now that the picture has changed, we are giving a fresh update on this market.
The support trend-line we noted earlier in the week, which showed the May low to the June low area, held in response to the initial FOMC reaction. However, during the overnight session, this support failed, sending prices down to Monday’s low, just below 2417.
The grey shaded bar on the chart notes the next level of support, which encompasses the area from last Friday’s low and this month’s low print earlier in the month, between 2410.50 and 2412.50. This area looks worthy of an attempt at a bullish position on the first touch; however, if this price band breaks, the next target comes in at 2402.75 (marked by the green line), the price at which the futures sold off to close the month of May. We also like this support area on first touch. The task will be to to control the 2400 level, a price that was fought over for much of the earlier spring this year.
Resistance areas will begin at that lower trend-line, which is around the 2430 level right now. The task for bears will be to turn that which was support into resistance while making a lower high. The next area to watch will be 2436, which was the price yesterday when the FOMC statement was released. Above that level, the upper trend-lines at 2443 and 2446 will serve as targets as well as potential short-term resistance areas.
While the overnight session has been weaker today, we keep in mind that this has been a buyer’s market in recent history. Therefore, we have to lean on the support areas; but our feel is to look for lower highs on the bounces.
Note: Exchange fees not included in calculations.