LIVE MARKETS S&P 500: Looking for a breakout

February 11, 20222:03 PM UTCUpdated ago

Summary
Companies

U.S. equity index futures off overnight lows,now modestly higher
Euro STOXX 600 index off ~0.5%
Dollar, gold ~flat; crude, bitcoin gain
U.S. 10-Year Treasury yield falls to ~2%

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S&P 500: LOOKING FOR A BREAKOUT (0900 EST/1400 GMT)

Over the past several weeks, the S&P 500 index (.SPX) has been struggling to sustain a breakout of the range defined by several long-term moving averages.

Traders will be watching for two-straight closes outside this zone to suggest the range may finally be giving way read more :

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Indeed, since Jan. 31, the SPX has primarily chopped in a range defined by its 100 and 200-day moving averages (DMA).

On Feb. 2 and again on Feb. 9, the SPX ended just slightly above the 100-DMA. However, the next trading day, it immediately tumbled back below this moving average, which ended Thursday just shy of 4,575.

Since reclaiming its 200-DMA on Jan. 31, the SPX has used this moving average as support. On Feb. 4, the SPX fell to around 4,451, which was just slightly above the 200-DMA. The SPX then snapped higher.

The 200-DMA ended Thursday at around 4,451.

Thus, traders may be watching for two-straight daily closes outside the range defined by these moving averages to add confidence in the next short-term trend.

Meanwhile, daily momentum remains stunted. Even on the days the SPX ended above the 100-DMA, the RSI was unable to muster enough strength to reclaim the 70.00 overbought threshold. Doing so, may signal the SPX has sufficient thrust to sustain a push to new highs.

On a downside range resolution, which leads to a test, or break of the Jan. 26 close at 4,326.51, traders will look for the RSI to establish a higher low vs its late-January trough. This sort of convergence pattern may suggest potential for another bottom of some form.

In any event, S&P 500 futures are exhibiting a similar pattern as the SPX. After dipping toward their 200-DMA in overnight trade, they have since recovered, and are now slightly green on the day. read more

(Terence Gabriel)

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Terence Gabriel is a Reuters market analyst. The views expressed are his own