S&P 500 technical forecast: SPX sell-off searches for support

S&P 500 technical forecast: SPX weekly trade levels

• S&P 500 marks third-consecutive weekly decline / breaks below yearly moving average
• SPX500 sell-off approaching key technical levels- risk for price inflection just lower
• SPX resistance 4134/37 (key), 4312, 4415– support 3906, 3844, 3760 (key)

The S&P 500 marked a third consecutive weekly decline with SPX500 plunging more than 6% off the yearly high. The decline broke back below the 52-week moving average last week with key support levels seen just lower. These are the updated targets and invalidation levels that matter on the SPX500 weekly technical chart heading into the March open.

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S&P 500 Price Chart – SPX Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; SPX500 on TradingView

Technical Outlook: The May low-week close at 3906 has fueled numerous pivots in price and over the next few weeks converges on former channel resistance extending off the 2022 highs. This level is backed closely by the objective yearly open at 3844 and the 61.8% Fibonacci retracement / December lows at 3760/63- a break / weekly close below this threshold is needed to suggest a more significant high was registered this month with such a scenario exposing the 2021 lows at 3664 and beyond.

Weekly resistance stands with the high-week close / March 22’ low at 4134/37 – a close above this threshold would be needed to validate the January breakout / mark resumption of the October rally towards the 61.8% retracement of the 2022 decline at 4312 and the 100% extension of the October rally at 4415.

Bottom line: The S&P 500 sell-off is approaching key support levels into the March open. From at trading standpoint, look to reduce short-exposure / lower protective stops on a drop towards the yearly open. Rallies should be limited to 4137 IF price is heading lower on this stretch. I’ll publish an updated S&P 500 short-term outlook once we get further clarity on the near-term SPX technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex