Chart of the Day - Tuesday, February 21st, 2023

Today’s Chart of the Day was shared by Stacey Lee (@BBaxter2020). The S&P 500 dropped 2.00% today, marking its worst day so far in 2023. Stacey points out that both the S&P 500 and its equally weighted version are back below their December highs. This qualifies as a failed breakout. As we know, failed breakouts are often followed by sharp moves lower. If you're feeling an ominous sense of Deja Vu, it's because most of the major declines over the past year started off this way. It's typical to see weakness in late February, but the bulls needed to defend 4100 and they couldn't. At this point, traders are watching 3900-3950 for potential support as the S&P 500 looks to retest its 200-day moving average and downtrend line from above. A break below that level would likely bring more bears out of hibernation.