SPX Completes Correction and Eyes New Highs Amid Tech Sector Recovery

The S&P 500's recent activity suggests a shift in momentum following a corrective phase. According to Elliott Wave analysis, the index completed a wave 2 pullback near 4776 and has since begun an upward trajectory, potentially entering wave 3. This bullish outlook hinges on maintaining support above 6775.50. A strong reaction from the 'blue box' area further reinforces the idea that buyers have regained control.

Examining the index's behavior relative to its 50-day moving average reveals a recurring pattern since November. The index has repeatedly plunged through this average, only to rebound and soar to new highs. However, recent attempts to surpass the 7000 level have met resistance, indicating potential seller activity. Whether the index can sustain a rally above the 50-day moving average will determine its short-term trajectory. A failure to do so could signal a rollover towards the 200-day moving average at 6623.62.

Fundamentally, the current buying spree appears to be driven by bargain-hunting in the tech sector. After a recent sell-off, investors may be looking to rebuild positions in FANG stocks, hoping for a return to previous growth levels. The performance of these stocks will be a key indicator of whether the S&P 500 can sustain its recovery.

It acts as a key indicator of the index's short-term trend. A break above it suggests bullish momentum, while failure to overcome it indicates potential selling pressure.

These stocks have a significant impact on the index due to their large market capitalization. Their recovery is crucial for the S&P 500 to reclaim its 50-day moving average and potentially reach new highs.

The S&P 500 is showing signs of recovery, but its ability to sustain this momentum depends on several factors. Key takeaways include:

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