Chart of the Day - Wednesday, August 14, 2024

🏆 Today’s Chart of the Day was shared by John Kolovos (@John_Kolovos).

• The S&P 500 hasn’t closed lower since last Wednesday. It’s up nearly +5% since then, marking the best five-day rally since November, when the index was thrusting off the October 2023 low.

• John points out that $SPX is testing potential resistance at 5,450, representing the 50-day moving average and the 61.8% Fibonacci retracement of the recent drawdown.

• If this were a countertrend move (bounce within a downtrend), it likely wouldn’t retrace more than two-thirds (61.8%) of its drawdown. Breaking this threshold (5,450) would prove that this has been a durable rebound.

Takeaway: After a sharp bounce, the S&P 500 has reached a confluence of potential resistance at 5,450. Reclaiming this level would open the door to a full recovery to all-time highs.