It was clear the recent run-up in equities couldn’t last forever, and bears finally returned to the mix this week. S&P 500 futures broke after a 20% gain during only about two months, as dip-buyers were punished with a thus-far 5.5% fall on heavy volume from the Sept. 2 all-time highs.
Bulls regrouped near the 3300 level to break a three-day slide, but the rally was unable to close above the 21-Day Exponential Moving Average near 3411. If equities continue to soften, technical indicators to watch for clues about support levels on the /ES include the 64-day Exponential Moving Average near 3282 and the yearly Linear Regression Line near 3165. But if markets are to make another run-up, a strong close above the volume node near 3430 level would be a positive sign for a rally. Watch for further resistance near the 3500 level.
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