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$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight)

AMEX:RSP   Invesco S&P 500 Equal Weight ETF
$SPX ( S&P 500 ) vs $RSP ( S&P 500 Equal Weight) – (Net High/Low +17)

The stock market came into this shortened week of trading on a three-week losing streak. It looked on Tuesday as if that streak might be extended to four weeks, but there was an abrupt turn in sentiment that powered a strong move in the major indices over the last three sessions from 3,900 support level . The losing streak was eventually broken and both the $SPX and $QQQ had reclaimed a posture back above their 50-day moving averages.

The resilience to selling efforts in the face of negative developments has fostered a sense that the market has priced in the near-term rate hikes already after enduring three, consecutive weeks of losses. At Tuesday's low, the $SPX was down 10.1% from the intraday high it saw on August 16, so there has been an added sense that the market had gotten oversold and was due for a technical bounce.

At the current juncture, the mid-term downtrend remains intact as $SPX remains trading below its declining 200-day moving average, and AVWAP from all time high.

The support to watch for this week remains at 3,900 level, the recent lowest level.

Bull Case: Reclaim above 4,212 AVWAP from all time high. Immediate resistance at declining 200-day moving average and downtrend line.

Bear Case: Breakdown of 3,900 recent low. next support at 3,800.

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