S&P 500: the air is getting thin
Technical analysis of the S&P 500 - viewed in the D1 chart
The S&P 500 was able to continue its price surge in the past few days and advance into the targeted range of 4,350-4,400 points. On Wednesday it hit an all-time high of 4,362 points. Accordingly, the trend remains clearly bullish at all time levels. Significant intraday setbacks immediately attracted bargain hunters in the last two trading days, who pushed the price back into the area of the daily highs.
Downside present
Under the surface, however, there are still downsides for the bulls. Above all, the breadth of the market sends numerous warning signals. Only a few stocks are driving the upswing, making the trend susceptible to a correction or reversal. The McClellan oscillator, for example, is trading in negative territory despite a record high. While 98 percent of the values in the S&P 100 are listed above the 200-day line, it is only 71 percent for the entire stock market, with a strong downward trend. Measured against some indicators, the sentiment is also extremely euphoric and thus represents a negative factor. The seasonality suggests a weak phase that will begin this month.
Critical support in focus
We therefore favor a medium-term correction phase after the end of the current impetus, which should send the index down at least 5-10 percent from the high. A price confirmation remains to be seen, however. Should the mark of 4,400 points be exceeded, short-term expansion targets of 4,407 / 4,419 points and 4,439 points could still be made. Looking at the bottom, the next support is at 4,314 / 4,321 points. A slide below that, especially at the end of the day, would, from our point of view, be an initial price confirmation for an extended break from the most recent rally. Potential next catchment areas are then 4,287 points and 4,257 / 4,268 points.
Note:
Despite careful analysis, Global Investa does not accept any liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.
The S&P 500 was able to continue its price surge in the past few days and advance into the targeted range of 4,350-4,400 points. On Wednesday it hit an all-time high of 4,362 points. Accordingly, the trend remains clearly bullish at all time levels. Significant intraday setbacks immediately attracted bargain hunters in the last two trading days, who pushed the price back into the area of the daily highs.
Downside present
Under the surface, however, there are still downsides for the bulls. Above all, the breadth of the market sends numerous warning signals. Only a few stocks are driving the upswing, making the trend susceptible to a correction or reversal. The McClellan oscillator, for example, is trading in negative territory despite a record high. While 98 percent of the values in the S&P 100 are listed above the 200-day line, it is only 71 percent for the entire stock market, with a strong downward trend. Measured against some indicators, the sentiment is also extremely euphoric and thus represents a negative factor. The seasonality suggests a weak phase that will begin this month.
Critical support in focus
We therefore favor a medium-term correction phase after the end of the current impetus, which should send the index down at least 5-10 percent from the high. A price confirmation remains to be seen, however. Should the mark of 4,400 points be exceeded, short-term expansion targets of 4,407 / 4,419 points and 4,439 points could still be made. Looking at the bottom, the next support is at 4,314 / 4,321 points. A slide below that, especially at the end of the day, would, from our point of view, be an initial price confirmation for an extended break from the most recent rally. Potential next catchment areas are then 4,287 points and 4,257 / 4,268 points.
Note:
Despite careful analysis, Global Investa does not accept any liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.
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