For the last three trading sessions the index has been teetering along the important 50-day moving average. On Thursday the index breached the trend line on the close, but was able to bounce back above it on Friday. This morning the index is down 0.2% and remains above the moving average by a few points. The last trade is 1553 and the 50-day simple moving average is at 1544.
As important as the moving average is to the index, there is a price support area at 1530, that is equally important. The green horizontal line represents the price support investors need to watch.
As long as the index can hold above 1530 in the short-term during any pullback it will bode well for the future of US stocks. With that being said we may become more aggressive buyers if the index continues to consolidate near the support zone of 1530-1544 throughout the next two weeks. Buying there represents a high reward-to-risk ratio.
Below is the daily chart of the S&P 500 over the last year.
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