S&P 500 Index Recovers Above 4422, But Ends the Week Lower

Summary:

The S&P 500 index recovers some lost ground on Friday, but still ends the week lower as the Fed's tapering program looms large over the market.

The S&P 500 extended the recovery from Wednesday’s decline and extended the rally above the 4422 price mark. A rise aided the recovery in the S&P 500 index in Apple and Microsoft shares. However, the decline in crude oil prices hampered the Energy index, capping the S&P 500’s gains for the day.

The S&P 500 index looks set to end the day 0.37% higher but remains lower for the week by 0.74%

Technical Outlook for S&P 500

The recovery in the S&P 500 has crossed over 4393.03 and 4422.92 but has met rejection at the channel’s lower border. Failure to transcend this border puts 4422.92 at risk once more. If this rejected return move extends into a more definitive resumption of the initial decline of Wednesday, 4393.03 could give way, ushering in new support at 4368.58. The dotted trendline that connects the lows of 21 June and 19 July intersects support at 4324.44. This could be a major defining pivot that determines if the sellers gain access to 4275.94 or not.

On the flip side, if the price can get through the channel, the 4480.26 all-time high becomes the new target. A break of this level opens the door towards the 4500 psychological resistance. The 127.2% Fibonacci extension of 4561.95 lies ahead. The upside move just described holds off previous bearish projections.