According to BofA Technical Research, S&P 500 Approaching its Resistance Level, while BoE Warns of Stretched Valuations

The Bank of America Global Research team wrote in its recent report that after wavering around the 4200-point support area, the S&P 500 Index (SPX) will now shift its focus to the 4325-4335 area as the next resistance level.

The financial institution also said that the rise in the 26-week and 40-week moving averages reflects the upward trend in the major market averages, although the 3-month VIX did not reach a tactical capitulation signal against the VIX.

“Since last week’s test, the SPX has defended 4200 range support to 4216, holding the rising 40-week EMA at 4240 (200-day EMA at 4211), and holding the June breakout at 4195 as support ." 4325-4335, the rising 26-week moving average is around 4350. The September 21 downside gap at 4375-4402 provides the next level of resistance,” – Bank of America research pointed out.

In its turn, The Bank of England flashed a warning about stretched valuations in global securities in its recent market health report. In the summary of the BOE Financial Policy Committee meeting they specifically pointed to unsustainable valuations of the U.S. dollar-denominated corporate bonds and U.S. technology equities.