Mapping the Market: S&P 500 on shaky ground as key test looms

June 10 (Reuters) – The S&P 500 is struggling to stay above a critical technical level after last week’s sharp selloff resumed on Tuesday. Traders will be watching closely to see whether it ​closes above or below that level on Friday, which may determine whether the U.S. benchmark index ‌makes a fresh run toward record highs or deepens its retreat.

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After tumbling more than 3% over three days last week, the S&P 500 gyrated wildly on Tuesday, before closing down 0.26% at ​7,386.65, leaving it right around a key weekly Gann Line — currently near 7,385. A ​Gann Line is a tool that links price movements with the passage of ⁠time to identify areas where a market might pause or reverse.

What makes this level particularly significant ​is its history. The same line spent months acting as a ceiling on the S&P 500, capping ​rallies on a weekly closing basis since late 2024. That changed in early May, when the index broke above it — a classic technical flip from resistance to support. The precision around the level has been notable: the index tested ​and held it in mid-May before surging to fresh highs, and a similar pattern has played ​out again in recent days.

After the latest fall, the risk is clear. A weekly close below the Gann Line, ‌followed ⁠by a break of the rising 10-week moving average near 7,300, could open the door to a deeper pullback toward 7,000.

If the weekly close were to hold above the line, the next hurdle would be the four-week moving average, sitting just above 7,460. A weekly close above that level would strengthen the case for ​a push back toward — ​and potentially beyond — the ⁠record intraday high near 7,620. Technical analysts use moving averages to strip out price extremes to get a clearer understanding of a market’s trend.

What the ​chart shows:

(Daily markets commentary from ​Reuters analysts on the signals financial charts are sending – and what they might mean.)