Yesterday, the S&P Index experienced a steep drop leading into the closing bell, ultimately closing near the day's low. Interestingly, this low price was just above the 200-day moving average (green line in the chart above, currently at 3933.59), making today a critical day for the index. Market participants wondered whether the price would dip below the 200-day moving average or make a recovery.
At the open, the major indices moved higher, with the S&P Index gapping up to 3959.21. This shift brought the price above the 38.2% retracement level of the decline from the February 2 high at 3956.53. Today's opening price, which also marked the day's low so far, played a crucial role. Additionally, the 100-day moving average (at 3961.33) was in close proximity to the 38.2% retracement level, and buyers promptly pushed the price above this level shortly after the open.
These technical levels now serve as a solid foundation for support and a gauge for market bias going forward. As long as the price remains above these levels, buyers maintain control in the short term. Traders seeking further upside may use this area as a stop-loss level. The price is currently trading near the day's high at 3984.91 (high of 3987.33). The next critical target on the daily chart is the natural resistance at 4000, closely followed by the 50% midpoint of the same decline from the February high at 4002.15. Breaking through both levels would signal even greater control for the buyers.
