Key Technical Indicators Signal Downside Potential for S&P 500
The market has recently exhibited a series of bearish indications, suggesting potential further downside for the SPX:
Price Action: The market gapped down after September 20th and hasn't recovered those levels.
Short-Term Moving Averages: The 50-day moving average recently crossed below the 21-day, indicating a potential short-term downtrend. Moreover, the price struggled to move back above the 50-day level.
Diverging Moving Averages: While the 21 and 50-day averages tilt downward, the longer 150 and 200-day averages remain bullish, suggesting a potential trend shift.
Critical Level Breach: The SPX closed below its 200-day SMA, a traditionally bearish signal.
Key Bearish Indicators:
TRIN: Indicates more volume with declining stocks.
TICK: Levels between -1000 to -1300 signal a bearish sentiment, hinting at institutional selling.
VIX: A 66% rise in the past week reflects increasing market uncertainty.
Prediction: Given these indicators, it seems probable that the SPX might not rebound off its 200-day SMA in the short term. There's potential for it to breach significant support levels, including S2 and the 1 Year anchored VWAP.
Price Action: The market gapped down after September 20th and hasn't recovered those levels.
Short-Term Moving Averages: The 50-day moving average recently crossed below the 21-day, indicating a potential short-term downtrend. Moreover, the price struggled to move back above the 50-day level.
Diverging Moving Averages: While the 21 and 50-day averages tilt downward, the longer 150 and 200-day averages remain bullish, suggesting a potential trend shift.
Critical Level Breach: The SPX closed below its 200-day SMA, a traditionally bearish signal.
Key Bearish Indicators:
TRIN: Indicates more volume with declining stocks.
TICK: Levels between -1000 to -1300 signal a bearish sentiment, hinting at institutional selling.
VIX: A 66% rise in the past week reflects increasing market uncertainty.
Prediction: Given these indicators, it seems probable that the SPX might not rebound off its 200-day SMA in the short term. There's potential for it to breach significant support levels, including S2 and the 1 Year anchored VWAP.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.