S&P 500 to face another bout of turbulence if history repeats

Key technical level for the index is 200-day moving average

The S&P 500 Index is on a roll, posting its best four-day rally since early July partly on the back of hopes that inflation data due Tuesday morning will show some cooling off ahead of next week’s Federal Reserve meeting.

The index just snapped three weeks of losses and is now bouncing around 4,110 points, within sight of its 200-day moving average around 4,270. Failure to break -- and then stay -- above the key technical support level in the aftermath of the inflation report may indicate the market is poised for another leg lower.

That’s what happened last month.

After CPI data on Aug. 10 showed US inflation decelerated by more than expected, the S&P 500 briefly surged to within a hair of its 200-day moving average. But the index then lost steam, failing to recapture that threshold and coming under pressure after a fast rise in Treasury yields rattled growth shares and upended the stock market’s $7 trillion early summer rebound.