Violet lines- Fibonacci retracements
Red rectangle -resistance
SPX is trading at the last trading day of February around 3,990. Price has so far retraced 50% of the post Covid rally from 2,189 to 4,817. Price has so far formed a higher low relative to the Covid low in 2020. Over the last few months price has found strong resistance at the 4,000-4,200 area. SPX in February made a failed attempt to break above 4,200 and has turned lower after the rejection. December and January price action has formed support around the 3,800 level. Failure to defend this level would be a bearish sign for SPX. Also a break above 4,200 would be bullish for SPX. As long as SPX remains below 4,200, it remains vulnerable to more downside.
