December 21, 2021
The SPX tested near-term support at ~4545 yesterday. A firmer core PCE number could bring a test of stronger, secondary support sits in the 4430-4500 range. That level looks very similar to the ~4200 floor we identified in early September and expect it will hold through Q1’22. Why? There’s still nothing in cross markets or internals to suggest the formation of a top. Defensive sector leadership over the past three days would only be troubling if the broader SPX was advancing at the same time. There’s no sign of trend deceleration on rallies and the yield curve remains positively sloped.