LIVE MARKETS-S&P 500: A coming slog?

* U.S. equity index futures suggest modest opening gains
* European shares rebound after positive Q3 reports
* Dollar down; gold, NYMEX Crude up; U.S. 10-Yr T-Nt yield ~0.86%

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S&P 500: A COMING SLOG? (0910 EDT/1310 GMT)
Coming into yesterday, the S&P 500 had fallen 5 of 7 days. That said, after an early
Thursday dip to 3,415 found support near the 50-day (10-week) moving average, at about 3,405,
the benchmark index reversed, and closed higher.
E-Mini futures are suggesting modest upside follow-through on Friday.
Nevertheless, of concern, although still positive, a weekly momentum measure is threatening
to roll over. Indeed, the MACD, appears at risk of breaking below its signal line, which would
be a bearish signal.
Still, if the SPX can overwhelm its most recent intraday reaction high at 3,515.76,
potential will increase for new highs above 3,588.11.
However, even in that event, much additional upside could prove to be a struggle. Of note,
since late 2018, the average foray into record-high territory has only been 4.6% above the prior
peak, with the median push only 2.5% above the prior high. Those levels are at 3,678 and 3,755.
But complicating the issue is the log-scale resistance line from late 2018, which
essentially capped strength in early September. This line, on a weekly basis, is now at about
3,630, or only a little more than 1% above the prior high. The line is ascending about 5-10
points per week, so over the next month or so, it will be a stiff hurdle in the 3,635/3,665
area, or only about 1%-2% above the prior high, and about 5%-6% above current levels.
Conversely, breaking down below the 3,405 area, can see pressure intensify. The rising
20-week moving average (WMA), which supported the market in late-September, now comes in at
about 3,297.
The September 24 low is at 3,209.45, and the 40-WMA (200-DMA) is now at around 3,120. These
levels are about 7%-10% below Thursday's close.
Thus, based on what may be significant levels, action over the coming weeks, may be quite
choppy, and especially volatile.



(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)