The 6,000 level on the S&P 500 (SPX) has been a key battleground lately — and it’s one that traders should be watching closely. We’ve been struggling to get through that level for about a week now.
On Monday’s open, the index tapped right up to 6,000 — or 5,999 — then backed away from it again. Then we crept up to 6,038 by Tuesday’s close, but we could easily come right back down anytime this week or next.
If you’ve been following my commentary over the past several weeks, I’ve said this was an important resistance zone and that we’d likely have trouble breaking through it. That continues to play out.
The big question is, where do we go from here?
Bounce or Break
If SPX can move cleanly through the 6,000 level, that would be great news for this market. It would clear the way to challenge the all-time highs. But if it can’t — and that looks likely unless some major news hits — we’re looking at another pullback first.
I’m watching three key moving averages as likely bounce zones if we do pull back: the EMA 20, the MA 200 and possibly even the MA 50. In my view, it’s more likely we’ll bounce at one of those first two levels before mounting another challenge of 6,000.
There’s always a chance we could fall through all of them, but absent any major news, I think that’s unlikely. For now, I’m leaning toward a bounce and retest scenario.
How to Approach the Trade
In this type of environment, patience is key. You don’t want to get caught chasing a breakout that hasn’t materialized or fading a level that the market could power through on a catalyst.
Right now, I’m simply watching how SPX trades around 6,000 and whether it can sustain any move above it. If it fails again and pulls back, the moving averages I mentioned will become the levels to watch for a potential long setup on a bounce.
The takeaway here is simple: Don’t force the trade. Let the market show its hand first.
Kane Shieh
Kane Shieh Trading
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