S&P 500 price forecast: SPX begins pullback from resistance

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US equities staged a recovery in the final full week of May after a threatening theme enveloped stocks in the first four months of 2022 trade.

In the S&P 500, the index put in a really strong showing last week to wipe away the losses from earlier in the month. The net result – a doji on the monthly chart of the S&P 500 and this isn’t a very common occurrence. This, of course, highlights indecision; but to anyone watching in the first few months of the year they’d likely remember that there’s been little of that as sellers have controlled the matter for much of the year already. This indecision is more indicative of sellers stepping back from the ledge but, this wouldn’t be the first time that we’ve seen that in 2022 trade.

This is very similar to what showed in March of this year, just after the Fed started hiking rates. Going into that rate decision, there was fear around QT and how quickly the Fed might look to pare their bond holdings. But – when they avoided the topic altogether stocks flew higher as shorts were squeezed, and that rally lasted into the end of the month and the end of Q1. But, as the door opened into Q2 sellers made a reappearance, and for the most part remained in-control of price action for the next six weeks.

At this stage, the S&P 500 is finding resistance around prior support, taken from the zone that was helping to hold the lows back in mid-March, around the time of that FOMC-fueled reversal. This resistance is in a confluent zone between a couple of Fibonacci levels, plotted at 4186 and 4211.
On the support side of the matter, there’s another confluent zone at-play, running between 3802 and 3830.

S&P 500 weekly price chart