The S&P 500 and Nasdaq Composite have dropped back below the record highs they set earlier this week, handing short-term control to sellers. Both indices now face their 100-hour moving averages as the next test, with the old breakout levels standing as fresh resistance overhead.
Sellers regain control after failed breakout
The S&P and Nasdaq Composite hit new all-time highs earlier this week, but buyers failed to hold the gains. Both indices have since fallen back below their prior high swing areas, a reversal that shifts near-term momentum toward sellers.
Those old highs now act as overhead resistance, and the longer prices stay under them, the more the failed breakout weighs on sentiment. A recovery back above those levels would start to ease that pressure.
S&P 500 tests its moving average
The S&P 500 has moved back below its former high swing area between 7,771 and 7,815. Staying under 7,771 keeps sellers in the stronger position, while a sustained break back above 7,815 would strengthen the case for a renewed push higher.
On the downside, the 100-hour moving average at 7,719.30 is the immediate support test. Holding above it gives buyers a chance to push back toward the old highs, but breaking below it with momentum opens the door to the 200-hour moving average near 7,691.
Nasdaq Composite faces a similar test
The Nasdaq Composite has fallen back below its prior high swing area near 27,190 to 27,288.79, with the upper boundary now a close risk level for sellers.
That decline has also brought the 100-hour moving average near 27,115 into focus. Buyers need to defend that level to slow the slide, and a sustained break below it would open the way toward the 200-hour moving average near 26,701.
What the failed breakout means
A breakout to a record high is bullish, but only if the price holds above the breakout area afterward. When it falls back below, as both indices have now done, the technical message changes and sellers gain the edge.
The old highs give sellers a level to defend, while the moving averages give buyers a place to make a stand.
Source: investingLive
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