The S&P 500 is expected to extend its consolidation phase beneath the February ‘pandemic gap’ at 3260/3338. Immediate support is seen at the 3021 200-day average while initial resistance awaits at 3153. Meanwhile, the percentage of S&P 500 stocks above their medium-term 63-day average has rapidly reduced, suggesting a broader downturn, according to Credit Suisse’s analysts.
“Immediate support is seen at the 200-day average at 3021 but only below 2966 would mark a near-term top, with support then seen next at 2923, before 2835 – the 38.2% retracement of the rally from March - which we look to then ideally hold.”
“Immediate resistance is seen at 3153/56, then 3190, above which we see 3233 and then 3260/3338. Above 3338 can open the door to not only a challenge on the 3394 record high but likely a move above here in due course, with resistance then seen next at 3500.”
“59% of S&P 500 stocks are above their 63-day average, representing a rapid fall from well over 90% earlier in June. Whilst this could be a warning with respect to a broader downturn, it does also suggest the ‘market’ is no longer overbought.”
“The number of stocks above their 200-day average continues to fall steadily, now at 33%, still pointing to a more neutral albeit slightly oversold long-term state.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.