Mapping the Market: S&P 500 pullback tests key support before next record push

The S&P 500 has retreated modestly ​from its most recent peaks and technical ​analysts will be watching to see if ‌the ​pullback breaches key price levels to determine whether the benchmark index can make another run at record highs anytime soon. (Click here for a more detailed ‌chart). The index, which edged up on Tuesday to end at 7,677.28, is within 1.6% of its August 13 record close of 7,798.99 and is only about 1.8% beneath its intraday peak of 7,816.70 reached the same day, ‌according to data supplied by LSEG.

Despite its recent retreat, bulls remain focused on a key support ‌zone between roughly 7,550 and 7,620. The area includes the June 2 high, the mid-June and mid-July highs, the intersection of two weekly Gann lines and the rising 50-day moving average. Gann lines are a system of trendlines used to predict where support and resistance – ⁠basically ​where buyers or sellers gain the ⁠upper hand – will emerge over time. Intersections are often viewed as especially significant.

A Gann-line convergence near 7,560 is drawing particular attention, ⁠especially as this intersection adds weight to an important support area. With several technical markers clustered in the same area, many traders ​expect buyers to emerge if weakness persists.

On the upside, a move above the record intraday ⁠high of 7,816.70 could put the 8,000-8,075 area into focus. If support breaks, the next notable magnet is the rising 100-day moving average ⁠near ​7,400, followed by the July low zone between 7,313 and 7,237. The rising 200-day moving average sits further below, near 7,105.

What the chart shows: (Daily markets commentary from Reuters analysts on the signals financial charts are sending — and what they might mean.) (Terence Gabriel is ‌a Reuters ‌market analyst. The views expressed are his own. Editing by ​Burton Frierson and Lisa Shumaker)