LIVE MARKETS-S&P 500 still searching for a breakout

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S&P 500 STILL SEARCHING FOR A BREAKOUT

The S&P 500 .SPX continues to test investors' patience. Despite higher oil prices and rising Treasury yields weighing on sentiment, the benchmark index has proven remarkably resilient.

The SPX closed Friday at 7,743.41, snapping a two-week losing streak. Even after the recent turbulence, it's down just 0.7% from its August 13 record close and less than 1% below the all-time intraday high set the same day.

What's frustrating traders is the lack of progress. Friday marked 30 trading days since that record close, and the index has essentially moved sideways over that span.

The setup resembles what followed the previous record close on June 2. Back then, the S&P 500 fell as much as 5.3% and spent weeks chopping around before finally breaking out to new highs 43 trading days later. This time, the deepest pullback was a more modest 3.7% into the September 16 low, but the market remains stuck in a range.

One sign of that indecision has been volatility. Daily Bollinger Bandwidth, a measure of historical volatility, fell to its lowest level since June 2021 on August 31. While the indicator is directionally neutral, extremely low readings often precede a larger move. Bandwidth has since started to expand, though traders are still waiting for a decisive breakout.

Futures suggest the wait may continue. E-mini S&P 500 futures are down roughly 0.4% ahead of Monday's open.

On the downside, initial support sits at the September 24 low of 7,662.57, followed by the 7,640 area, where the rising 50-day moving average and a weekly Gann line converge. Below that, the 100-day moving average near 7,550 and the September 16 low at 7,507.77 become key levels to watch.

On the upside, resistance comes in at the September 22 high of 7,782.19 and then the record highs. If bulls can finally break free of the recent trading range, 8,000 looms as the next major target.

(Terence Gabriel)

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