The S&P 500 Retesting the 200 Day Moving Average

By | November 3, 2016

The support zone on the daily S&P 500 chart was broken in Tuesday’s session, but a large hammer candle formed suggesting the index may have made a temporary low and could be poised for a bounce. That was not to be the case and it continued lower on Wednesday and again in today’s session.
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The index is clearly oversold and currently positioned just above its 200 day moving average, which is another logical technical support level, but applying logic to markets is itself illogical. What can be said at this point in time and price is that the roughly 4.5% pullback off the August/September highs penetrated several key levels of support, turning them into key levels of resistance, and it will take a lot of upside momentum and a reversal in investor sentiment to pierce through these multiple layers of resistance.

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