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S&P 500 DEFENDS KEY LINE AS BULLS PUSH FOR RECOVERY

U.S. stock futures are pointing higher on Tuesday, with tech doing much of the heavy lifting. Chip stocks are extending gains for a second straight session, while easing geopolitical tensions in the Middle East also help lift sentiment.

S&P 500 e-mini futures EScv1 are up more than 30 points, or about 0.5%, suggesting the S&P 500 index .SPX, which ended Monday at 7,405.73, is set for a solid bounce at the open.

On the technical side, traders are keeping a close eye on how the S&P 500 is behaving around a key weekly Gann Line -- a tool that links price and time to flag potential support and resistance levels.

After last week’s sharp three-day drop of more than 3%, bulls are taking some comfort that this Gann Line, which is now around 7,385, appears to be holding as support so far this week. More interestingly, the same line had acted as resistance for months, capping rallies since late 2024 on a weekly closing basis. That changed in early May, when the S&P broke above it -- flipping it from resistance to support.

There’s been some notable precision around this level, too. In mid-May, the line aligned closely with a key long-term marker, and the index held it before surging to fresh highs. A similar pattern played out last week and again on Monday, with the S&P testing levels near the line and holding.

With futures higher, the next hurdle is the four-week moving average, currently just above 7,460. A weekly close above that would strengthen the case for a run back toward -- and potentially beyond -- the record intraday high near 7,620.

For now, momentum appears to be back on the bulls’ side. But if the S&P closes the week below this Gann support -- and then if it violates the rising 10-week moving average near 7,300 -- it could signal a deeper pullback toward 7,000.

(Terence Gabriel)

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