Monday's Market Minute: S&P Futures Bounce, But Trend is Still Down

S&P 500 futures made a big push over the 3,800 level on Friday, notching a 3.4% gain as the contract bounced off lows it made near 3,639 and rocketed back above 3,900. But the /ES is still in a downward channel, with the upper trendline beginning with the highs from late March and traveling downward along the other highs from April and June.

S&P 500 futures made a big push over the 3,800 level on Friday, notching a 3.4% gain as the contract bounced off lows it made near 3,639 and rocketed back above 3,900. But the /ES is still in a downward channel, with the upper trendline beginning with the highs from late March and traveling downward along the other highs from April and June.

Price also is now trading near the 21-Day Exponential Moving Average, which is the nearest of the major moving averages and could be an important resistance level to overcome. In terms of technical developments, the Moving Average Convergence-Divergence (MACD) and the Parabolic SAR both are making bullish crossovers today. However, there’s also resistance to watch for near the 4,000 level.

Technical analysis typically discourages looking at arbitrarily assigning importance to round, even numbers, but in this case, this level matches up with the yearly -1 Standard Deviation Channel. Just beyond this point is also the previously mentioned downward trendline near roughly 4,050, so stay alert for a potential pullback if the price reaches these levels.

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