Technology is continuing to do the heavy lifting. Without it, the stock markets would look and feel a lot different. While the sector continues to trend positively, dip-buying in tech-heavy indices or ETFs like the S&P 500 ETF Trust (SPY) or Invesco QQQ Trust (QQQ) continues to make more sense than trying to pick the top from a trading point of view, explains Fawad Razaqzada, technical analyst at

Let’s take a look at the S&P chart:


The S&P 500 futures were little-changed at the time of writing, after breaking and closing at a fresh record high on Wednesday. The breakout means the path of least resistance remains to the upside until the charts tell us otherwise.

The base of Wednesday’s breakout at 5,385 is now the most important short-term support level to watch on any potential dips. Support will need to hold there to maintain the short-term bullish bias intact. Below this level, 5,333 is the next important zone, where we also have the 21-day moving average converging. This level was previously a significant resistance level.

Finally, 5,205 is another level to watch, marking the most recent low formed a few weeks ago, before the latest rally. Should we move below this 5,205 level at some point, then this would probably lead to a correction of some sort. It is therefore the line in the sand for me in so far as the short-term bullish trend is concerned.

The corresponding levels to watch on the SPY are shown on the chart below:


As per the chart, the short-term support level is at 537, followed by 533 and 524. The most recent low, and therefore the line in the sand, is at 518.

We have now had well over 300 trading days since the S&P 500 has had a 2% down day, so the bears are nowhere to be seen. Until we start to see the break of such a streak and a lower low to confirm a potential bearish reversal, the bears will need to remain patient, even if the markets are starting to look quite overvalued.

The bullish trend needs to weaken first, before it can break. This requires time. Indeed, this has been one of the longest rallies ever, with the S&P 500 posting 27 new all-time highs already this year. I wouldn’t bet against more new highs given how crazy investors have been about AI and technology stocks.

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