S&P 500

S&P 500 is Retesting the 1991 Resistance … What’s Next?

Witawat (Ed) Wijaranakula, Ph.D.
Fri Jan 30, 2015

The S&P 500 information technology sector tumbled over 4% last week, thanks to the Microsoft [NASDAQ:MSFT] earnings report that failed to impress Wall Street. Apple [NASDAQ:AAPL] surged over 8% for the week after reporting a solid quarter. Google [NASDAQ:GOOGL] missed their numbers again after a bad quarter but the stock still managed to move higher.

The S&P 500 has been retesting the 1991 support level since the beginning of the year. If the S&P 500 can bounce off the 1991 support level and break out of the falling wedge, the next head resistances are 2033 and 2052. If the S&P 500 breaks down the 1991 support level, the next supports are 1973 and 1945. 

The fact that the 10-year U.S. Treasury yield took a 6% nosedive to an intraday low of 1.65% on Friday, breaking down the 1.66 resistance level set in May 2013, suggested that the S&P 500 might want to go lower.

S&P 500 Summary: –3.1% YTD as of 01/30/15

Outperforming Sectors: Utilities 2.34% YTD, Healthcare 1.17% YTD, Consumer staples –1.27% YTD, Materials –1.99% YTD and Telecommunication services –2.24% YTD. 

Underperforming Sectors: Consumer discretionary –3.14% YTD, Industrials –3.69% YTD, Information technology –3.91% YTD, Energy –4.88% YTD and Financials –6.99% YTD.

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