S&P 500 index: Clears 200-DMA, but now will it hold?
- U.S. equity index futures edge up: S&P 500 up ~0.3%
- U.S. Oct Core PCE price index MM < est, YY in-line
- U.S. initial jobless claims 225k vs 235k est
- Euro STOXX 600 index up ~1.1%
- Dollar, bitcoin down; gold, crude rally
- U.S. 10-Year Treasury yield falls to ~3.60%
S&P 500 INDEX: CLEARS 200-DMA, BUT NOW WILL IT HOLD? (0900 EST/1400 GMT)
In the wake of Wednesday's post-Powell surge, the S&P 500 index 
SPX closed back above its 200-day moving average (DMA). Traders are now watching to see if this closely watched long-term moving average will now act as support, something it has, ultimately, failed to do since it gave way in early-January.
Indeed, after a 397-trading day run of closes above its 200-DMA, the SPX ended below this moving average on Jan. 21, 2022.
Five stints back above it from later that month to early April lasted as long as nine trading days (tds) and as short as one trading day (average 4.4).
A dip back to the moving average on Feb. 4 did hold temporarily. However, the subsequent bounce failed to make a new reaction high, and the SPX then collapsed again.
Wednesday's close back above the 200-DMA was the first since April 7, or 163 tds. This, after the moving average proved to be near-perfect resistance in mid-August.
Of note, in the wake of a 58-trading day run of closes below the 200-DMA with the early-2020 pandemic crash, once reclaimed, the SPX only saw two one-day closing violations of the moving average, with both by only about 0.4%, as a major bull-run was unfolding.
The moving average ended Wednesday at 4,050.30, and will likely dip to around 4,048.50 on Thursday.
Thus, ideally, on any pullback to now test the 200-DMA as support, traders will want to see short-lived and minor violations at most, prior to a snap to new reaction highs.
That said, there are more hurdles not far above Wednesday's 4,080.11 close, which was also the high of the day.
For the start, the resistance line from the January high now comes in around 4,103 on Thursday. It is falling around 3 points per-session. It also played its part in capping summer strength.
The Sept. 12 high was at 4,119.28 and the 76.4%/78.6% Fibonacci retracement zone of the August-October down-leg is in the 4,128-4,147 area.
The 100-DMA, which ended Wednesday at 3,921, has recently been showing its mettle as support. It contained weakness in mid and late November.
(Terence Gabriel)
*****
FOR THURSDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE