The S&P 500 is likely to stay choppy - is a retest of 6,000 ahead?
The S&P 500 Index gained 0.9% on Monday, recovering from earlier losses triggered by Moody’s downgrade of the U.S. sovereign credit rating on Friday.
The 6,000 level remains a key resistance point, which the market failed to break during last week’s rally. Today, the S&P 500 is expected to open 0.1% lower, with investors closely watching a series of speeches by FOMC members later in the day.
Investor sentiment has improved, as reflected in the last Wednesday’s AAII Investor Sentiment Survey, which reported that 35.9% of individual investors are bullish, while 44.4% are bearish.
The S&P 500 index slightly extended its uptrend yesterday, closing at the highest level since late February.
S&P 500 Futures Contract: Still Over the Trend Line
This morning, the S&P 500 futures contract is moving sideways, after slightly extending their uptrend yesterday. The contract continues to trade above an upward trendline.
Support remains near the 5,870-5,900 level, marked by the recent local low.
Conclusion
The S&P 500 is expected to open virtually flat today. I think that the last week's bullish momentum is still being tested, and we may see increased volatility in the near term.
Here’s the breakdown:
- S&P 500 recovered its losses after Moody's downgrade on Friday.
- The S&P 500 reached its highest level since February, nearing the 6,000 level and extending gains for those who bought based on my Volatility Breakout System.
- The 6,000 level remains a key resistance that the market failed to breach.
The full version of today’s analysis - today’s Stock Trading Alert - includes the additional stock trading ideas and the current S&P 500 position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Stock Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Oil Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free stock newsletter today.
Thank you.
Paul Rejczak
Stock Trading Strategist
Recommended for You
- Tax-Optimized Legacy Planning: How Physical Gold IRAs Work in 2025 Learn how forward-thinking investors are protecting generational wealth through tax-advantaged precious metals strategies that function independently of market volatility.
- Volatility Breakout System: Paul's Proprietary Trading Approach Discover how this market-tested trading system has outperformed the S&P 500 by identifying key turning points and generating precise entry signal