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S&P 500 Outlook Vulnerable as Risk Barometer Drops, Volatility Jump Possible

S&P 500 Outlook Vulnerable as Risk Barometer Drops, Volatility Jump Possible

2020-03-05 10:00:00
Justin McQueen, Analyst
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S&P 500 Price Analysis & News

  • Risk Barometer Signals S&P 500 Vulnerability
  • Cross Asset Volatility Remains Elevated
  • S&P 500 Fails to Clear Key 3128 Level

S&P 500: Despite yesterday’s impressive relief rally across US equities, concerns continue to linger with Fed’s decision to provide an emergency cut doing little to dispel the current macro uncertainty thus far. Alongside this, while the S&P 500 posted a modest rebound, the risk barometer (Figure 1) continued to head lower, which in turn raises the risk that the S&P 500 is not out of the woods yet. While our cross-asset volatility index (Figure 2) remains elevated, therefore the S&P 500 is vulnerable to another pick up in volatility. At the same time, with the index failing to make a close above key resistance situated at 3128, downside risks are likely to persist.

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Figure 1: Risk Barometer Raises Risks for S&P 500

S&P 500 Outlook Vulnerable as Risk Barometer Drops, Volatility Jump Possible

Figure 2: Cross Asset Volatility Remains Elevated

S&P 500 Outlook Vulnerable as Risk Barometer Drops, Volatility Jump Possible

S&P 500 Price Chart: Daily Time Frame

S&P 500 Outlook Vulnerable as Risk Barometer Drops, Volatility Jump Possible

Source: IG Charts

S&P 500 Technical Levels

Support

Resistance

3000

-

3128

50% Fib

2986

76.4% Fib

3180

Jan 8th Low

2860

YTD Low

3200

-

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

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