Market Fights Resistance At Key Levels

The market started off the last week of the month and quarter with volatility. As we enter the end of quarter three, it appears that the markets might close below 3748.75 on the S&P 500 futures. Why is this relevant?

If the market closes below this level, the first three quarters of 2022 will have wiped out all of 2021’s gains. 

Upcoming market events

Market events this week include Personal Consumer Expenditure Index (PCE), Initial jobless claims, and Chicago Federal Reserve President Charles Evans. The PCE report will take place on Friday at 8:30 a.m. Eastern. This is notable because the Federal Reserve (Fed) has indicated that the PCE report is a leading report regarding their future interest rate decisions.

Chicago Fed President Charles Evans is set to speak on Wednesday at 2:00 p.m. Eastern. This is significant because the last time Evans spoke, the market responded negatively. It appears that this week will be no different than the last few; the market will be on pins and needles.

Today’s action

All eyes are focused this week on 3,700 for the S&P 500 futures. The level serves as a gauge for the sentiment in the market. Above 3,700, the market can find itself rallying back to liquidity. Below the 3,700 level, the market may move towards making a new low of the year.

As today’s cash session opened, and the S&P 500 futures were above 3,700. The market found some support, and briefly rallied in the early hours of the session. The pop was short-lived and ultimately came back to test the 3,700 level. After a probe of this level, it quickly failed. For the remainder of the day, selling pressure was too much for the market. It struggled to find any significant move to the upside.

In the afternoon session, the market went back to test the lows of last week, where it finally found support. From this point on, the last few hours of the cash session were spent slowly working back towards the resistance at 3,700. As the session came to an end, the market made one last futile attempt to break through 3,700, only to be rejected. 

The week remaining

Will the markets break through the newly found level of resistance at 3,700? This critical level will be the battleground if the markets want to make any significant move higher.