New Level Gains Importance on S&P 500

SPCFD:SPX   S&P 500 Index
The S&P 500 has had a violent rebound from Friday’s oversold levels. It’s rallied more than 5.5 percent so far in the week, the index’s best three-day gain since early April.

The bounce has brought prices back to a new level that may be resistance: 3465. This was the high on October 21 and near the close on Friday, October 23. (Daily and weekly close.)

The level could be important because it was followed by a sharp drop on Monday, October 26, when SPX knifed below its 50-day simple moving average ( SMA ).

The index’s return to 3465 this morning, followed by selling, could reinforce the importance of this level.

Next, traders may eye 3425 (blue line on chart). That was resistance in the week ended September 11 and again on the big October 6 candle. It also provided support two weeks ago.

There’s a Federal Reserve meeting tomorrow and non-farm payrolls on Friday. However, investors face bigger uncertainty given the political situation.

The result could be prices whipping around between technical levels based on headlines and tweets. In that case, it could help to focus on key price points. 3465 may now be one of those lines to watch on the index.

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