In focus: Stocks hold support

By Lawrence G. McMillan

The Standard and Poor’s 500 Index (SPX) was under a reasonably large amount of pressure last week. By week’s end, it had declined to 1425 — a support level, right at the lower band of the bullish channel that has defined this rally that began in early June. 

The S&P 500 bounced strongly off of that support level. It is now moving higher, and appears to be ready once again to challenge the highs at 1470-1475. If it can break through, SPX should then set its sights on the upper band of the channel, which would be in the 1510 to 1520 area by that time.

This week’s action confirmed the support level at 1425-1430.  Below that there is support in the 1395-1420 range, but if SPX were to fall that far, it would violate the lower band of the bullish channel, and that would alter the intermediate-term picture bullish to neutral, at best.

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