S&P 500 - good support at the 857 level

Last week we wrote that the S&P 500 has to maintain above the 900 level for the rally to continue being viable. This has not occurred and over the past week with the S&P 500 trading below 900. Closing below 900 indicates technical weakness and drastically lowers the odds of a rally.


There is good support at the 857 level and the short term decline of the S&P 500 should slow down there. A close below 857 would tell us that bearish momentum is stronger than expected and would take the S&P 500 to the next key support at 818. 951 and 818 continue to remain critical numbers. A close higher than 951 would indicate a high probability of a rally to at least 1007, while a close below 818 would take us to the November 2008 low of 741. In the mean time, the most probable scenario is for the S&P 500 to range trade between 857 and 918 again.

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