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#47 - Technical update on our SPX view

As discussed in our monthly we are constructive for risk as we approach the year's end. We are wary, however, of another risk-off leg, which in our view would present more favorable entry points for the anticipated year-end rally.

We're now observing increasing evidence that this last leg may unfold.

After testing a confluence of supports - encompassing the upward trendline from the Oct 22 lows, the downward channel from Jul 23 highs and the 200-day moving average – and displaying negative divergence in oscillators, the SPX rebonded. This rebound was in line with our expectations, although it fell slightly short of our 4403 target, which aligns with the gap from September 21.

Upon encountering a cluster of higher volume resistance in the 4360/70 the move was successfully capped by the bears. Oscillators are now rolling over implying a shift in risk/reward. This suggests a possible retest of the October lows, or even a further decline. Should this projection hold, we anticipate a descent to the 4120/50 range. We would consider this an optimal zone to increase our position in anticipation of the year-end rally.

Supports: 4325 - 4270 - 4215

Resistances: 4403 - 4430

Risk: Should the index exceed 4430, the technical picture would turn bullish.


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