The S&P 500 Index (^SPX) closed higher last week. But after stumbling early, it still closed inside last week’s range. Under the continuing shadow of the Iran conflict, investors remain caught between risk appetite and geopolitical caution, notes Buff Dormeier, chief technical analyst at Kingsview Partners.
Recent reporting continues to point to a tense Middle East backdrop, with US/Iran tensions, shipping route concerns, and energy volatility still part of the battlefield. Volume in some ways has improved, but in other ways has disappointed.
S&P 500 Index (^SPX)
Weekly S&P 500 Capital Weighted Volume finished with 55% of activity to the upside. Upside volume was above average, and total volume was slightly above average. Capital flows were also constructive, with 55% of Capital Weighted Dollar Volume registering as inflows. Capital inflows and total capital flows both finished above average.
Meanwhile, the S&P 500 reclaimed its 50-day intermediate average after slipping below it the prior week. That recovery was constructive. But price remains in a tactical holding pattern beneath resistance and above support.
The 7,300 level remains the next key S&P 500 support level, while 7,000 carries double reinforcement as both an intermediate price level and trend level. If the campaign were to deteriorate more deeply, the 6,300-to-6,000 zone would represent critical long-term support.
For now, the broader ranks are holding, the brass commanders remain relevant, the troops are still in the field, and the generals have reclaimed a critical ridge. The army remains on the battlefield, but the supply lines still need fuel. In markets as in war, the objective is not to predict every skirmish, but to manage risk before it manages you and let volume confirm the next advance.
