Chart of the Day - Tuesday, September 26, 2023

Today’s Chart of the Day was shared by Brian Shannon (@alphatrends). The S&P 500 ($SPY) fell -1.47% today, closing at a three-month low. Price is searching for support after violating the August 2022 highs. We're currently testing the Volume Weighted Average Price (AVWAP) anchored to the March low (green, $426). If $SPY can't stabilize here, Brian points out that there's a much more solid support level, around $420-$417. This level represents a confluence of the 200-day moving average, the YTD AVWAP, and the 38.2% Fibonacci retracement of the rally off the October lows. Also, $420-$417 was a major resistance level between May '22 and May '23.  You'd expect this former resistance level to act as support, given it hasn't been tested since the breakout. If price can't hold such a well-reinforced level, it would confirm that this is more than just a healthy correction during a seasonally weak period.