By Lawrence G. McMillan
The S&P 500 index continues to exhibit the traits of a bear market, even ignoring the usual positive seasonality around the Fourth of July holiday. The accompanying graph shows that the index’s downtrend lines – lower highs and lower lows – remain in effect, and that is all you need to determine that a bear market is in place.
There is short-term support for the S&P /zigman2/quotes/210599714/realtime SPX +0.40% near the 3740 area, which was where three recent days saw a temporary low. Below that, of course, there is support at the year-to-date low of 3630. To find support below there, one has to look at a longer-term chart. There should be further support near 3500 and then 3200.
The peak of the last failed oversold rally at 3940 should provide resistance, as should the 4070-4170 trading range of early June.
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