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S&P 500 Testing Fibonacci Support as MACD Eyes Crossover

S&P 500 Testing Fibonacci Support as MACD Eyes Crossover

Rich Dvorak, Analyst

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S&P 500 PRICE OUTLOOK: STOCK MARKET PULLS BACK FROM RECORD HIGH

  • Stocks are reversing hard from all-time highs with S&P 500 price action down over -1%
  • The S&P 500 Index is attempting to find confluent support around the 4,300-price level
  • Eyes on Fibonacci retracements, the 14 June high, rising trendline, and MACD crossover
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S&P 500 price action took a nasty tumble at the New York opening bell on Thursday. Stocks slid across the board as the VIX ‘fear-gauge’ exploded higher. All major stock indices are trading in the red and down around -1% on the session.

The move is corresponding with an extended plunge in bond yields with the ten-year Treasury nosediving over 15-basis points since Monday to 1.3%. As such, it seems equity investors are finally catching on to the fears of slowing economic growth being reflected in the bond market.

Since Wall Street came online, however, the S&P 500 Index has chopped around the psychologically-significant 4,300-price level. This area of confluent support is underpinned by the 23.6% Fibonacci retracement level of the S&P 500’s trading range from 12 May to 07 July.

SPX – S&P 500 INDEX PRICE CHART: 4-HOUR TIME FRAME (30 APRIL TO 08 JULY 2021)

SPX Index Price Chart S&P 500 Forecast

Chart by @RichDvorakFX created using TradingView

Maintaining altitude here could encourage S&P 500 bulls to close the gap lower from this morning’s open. Although, if selling pressure resumes and the 4,300-handle is breached, traders might look to defend support underpinned by the 14 June high and 4,255-price level.

US 500 Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -4% -5% -5%
Weekly -4% -4% -4%
What does it mean for price action?
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Sustained downward pressure could see a bearish MACD crossover materialize as hinted at on the 4-hour chart above. This might bring the ascending trendline and 50-day simple moving average into focus as subsequent technical barriers with potential of helping keep S&P 500 price action afloat.

-- Written by Rich Dvorak, Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

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