News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • The US is in focus over the coming days with Fed Chair Jerome Powell set to testify in front of the Senate Banking Committee, while September US PCE data and two gauges of US manufacturing activity are due. Get your market update from @CVecchioFX here:https://t.co/9RpmQxXXAw https://t.co/Uup86TPbJm
  • Fed's Kaplan to retire on October 8th - Dallas Fed statement
  • $GBPJPY bull flag focus on the 152.50 area https://t.co/beXYYUFl6c https://t.co/QorvmlSWQl
  • Gold prices have plunged more than 5.1% off the September highs with the sell-off taking XAU/USD back into key technical support. Get your $XAUUSUD market update from @MBForex here:https://t.co/XqIJ5OJ5Hv https://t.co/O3CSNNCCWo
  • WTI higher by almost 2% as global energy prices continue to rise $CL $CL_F #Oil https://t.co/6Zu2zR0ZDP
  • Higher global natural gas prices could hint to a near-term increase in US exports - Moody's via BBG $NG $NG_F
  • WTO crude is on pace to put in its highest session close in three years. If it clears 76, it will be a far bigger technical event. $CL_F weekly chart below https://t.co/UPviQVRL2F
  • Fed's Williams: - It is reasonable for the taper to be completed by mid-2022 - I recognize that inflation is currently elevated
  • Both USD/CHF and USD/SEK rates appear poised for most upside in the near-term, while surging energy prices may be offering a different route for USD/NOK. Get your market update from @CVecchioFX here:https://t.co/0HFq7L8RCm https://t.co/7wF7mk4ip4
  • Fed's Williams: - Optimistic that the economy will allow an "imminent" taper - Elevated levels of uncertainty make forecasting difficult
S&P 500 Price Outlook: Index Tests Trendline Extremes in Bear Market

S&P 500 Price Outlook: Index Tests Trendline Extremes in Bear Market

Peter Hanks, Strategist

S&P 500 Forecast:

  • The S&P 500 is down more than 25% since its February 12 peak
  • Friday saw price action slow compared to recent days following the index’s worst daily performance since 1987
  • Still, volatility looks primed to continue and IG Client Sentiment suggests the S&P 500 may fall further

S&P 500 Price Outlook: Index Tests Trendline Extremes in Bear Market

The S&P 500 posted a few record-setting performances this week including two triggered circuit breakers and a limit higher ahead of Friday’s open. Altogether, coronavirus, liquidity and recession fears sparked panic that saw the SPX fall -13.25% this week alone. The catastrophic stock market losses have wiped away trillions of dollars in market capitalization and sent the index crashing toward a supportive trendline that has held since 2009.

S&P 500 Weekly Price Chart (2009 – 2020)

S&P 500 weekly price chart

Created in TradingView

While the Fed’s operations look to provide a short-term cushion for the equity market and sentiment, fear may eventually return to the market as containment measures stifle economic activity in the world’s largest economies. Consequently, confluent support around the 2,354 mark may prove critical in staving off further losses.

What Markets are Rising as the Dow Jones and Crude Oil Collapse?

Since the three US indices have forfeited their bull market status already, the trendline has assumed an almost symbolic status as marking the final technical level to keep the rally since 2009 alive. Should it fail, the door to further losses will be opened and the 2,000 mark may quickly come into view. Therefore, technical traders should keep a close watch on the area in the week ahead.

Since the fundamental landscape really has no historical comparison, forecasting directional moves is incredibly difficult. That being said, calling a bottom at this point would be rather presumptuous and IG Client Sentiment data may suggest the S&P 500 has further to fall with a majority of traders now net-long the index.

Further still, recent weeks have displayed the risks attached with maintaining exposure over the weekend so it would be prudent to postpone entry until next week. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES