What’s inside:
- S&P 500 sliced through 2380 support, trend-line
- French election gap likely to fill today, and worse
- Price support doesn’t arrive until 2322/29, Feb ’16 trend-line could come into focus at some point
Find out what is driving the stock market in our market forecasts section.
We started out Tuesday’s post by saying this: “The S&P 500 has been consolidating since the last week of April, with the period having set a sturdy floor right around 2380; this level has become our ‘line-in-the-sand’ for maintaining a neutral to bullish stance.”
And then the 'Trump dump' happened.
The S&P gapped down to around the 2380 level, then proceeded to quickly slice through taking off the table the notion of further consolidation. The November/April trend-line also broke with 2380. The sell-off put the market in the gap from the first round of the French elections, and with a gap-fill only about 8 handles from where it closed yesterday there is a good chance we see it happen today, and potentially worse. Other than the gap-fill, there isn’t any solid price support until in the vicinity of 2322/29, the March and April lows. If things get nasty, a break below those lows opens clears a path towards a test of the important February 2016 to current trend-line.
Resistance arrives at the April 24 gap-day low at 2369, and should buyers get ambitious the 2380 level should prove to be problematic for a further advance. In the short-run, the market is positioned to continue yesterday’s dagger of a day.
S&P 500: Daily
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---Written by Paul Robinson, Market Analyst
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