The S&P 500 Nears Critical Support Level
The S&P 500 is approaching a key technical support around 6,735 while maintaining an overall upward trend. However, caution is advised due to short-term price dynamics and significant upcoming options expiry risks on November 21.
Technical Indicators and Support Zones
After falling from a high of 6,920, the index now tests a strong support area that includes:
- The 50% Fibonacci retracement from June 2025
- A high-volume trading node
- A rising trendline
The daily Relative Strength Index (RSI) has dropped below 50, signaling a potential weakening of buyer control.
Risks from Options Expiry
The November 21 options expiration features significant open interest, mostly skewed towards put options at the $6,000, $5,500, and $5,000 strike levels. The Max Pain price point is estimated at $6,450, well below the current index level. This gap could trigger dealer hedging activity that may impact market direction.
Potential Market Impact
If the S&P 500 fails to hold 6,735 and lacks support from macroeconomic developments, intensified hedging flows might increase volatility. This could push the index down toward the 6,500–6,450 zone.
The S&P 500 is testing a critical technical level near 6,735, with an upward trend still in place.
The daily RSI has dipped below 50, indicating a potential shift in buyer control.
The November 21 options expiration marks significant open interest, with a skew towards puts at $6,000, $5,500, and $5,000 strikes.
Author's Summary
As the S&P 500 approaches a crucial support level near 6,735 ahead of November 21 options expiry, increased volatility risks call for cautious market positioning.