The S&P 500 cash index (SPX) closed at 1313.80 on Friday, net weekly gain 39.55 points, up about 3.1%. A great bounce even though the market still had lots of uncertain things going on.
This week is the end of March and the beginning of April. The monthly bias favors the upside, and end-of-month window dressing may postpone any further decline under next week.
But the price is moving into the major decision zone, the beginning point of either making a continuation move up or resuming the previous decline.
Technical Analysis
Based on the SPX weekly chart (above), SPX moved back above the 1300 key line and held up for Friday’s close. This indicates that SPX hasn’t yet lost the 1300 line support.
We should remember that the long term and intermediate term uptrend remains intact as long as the major support in the 1227-19.50 range holds SPX up.
For the short term, there is a slightly different outlook. The SPX attempted to fill the March 9 gap around 1320.09, but it failed. The price only made 1319.18 and gave up its advance on Friday. The unfilled gap will continue acting as a resistance level.
If SPX is unable to fill that gap early in the week, price is likely to dip back down into the 1300 area for testing. A loss of support in the 1300 area again will be bearish and we would expect the SPX could resume its decline as soon as the price moves under 1294.25 line.
The window dressing may help to hold up the price. But as always unpredictable external events may bring unexpected price moves.
Monthly resistance 1350 and support 1225; Weekly resistance 1332 and support 1275
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