S&P 500 Technical Outlook: SPX500 Stock Plunge- More To Come

2022-04-27 20:00:00

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S&P 500, Nasdaq Technical Price Outlook: Near-term Trade Levels
S&P 500 Price Chart – SPX500 Daily
S&P 500 Price Chart – SPX500 240min
S&P 500 Trader Sentiment – US500 Price Chart
US Economic Calendar
Active Technical Setups

S&P 500, Nasdaq Technical Price Outlook: Near-term Trade Levels

S&P 500 technical trade level update – Daily & Intraday Charts
SPX500 plunges towards support at the yearly lows- rallies could be short-lived
SPX Resistance 4309, 43921, 4450(key) - Support 4117, 4416/35 (critical)

The S&P 500 plummeted more than 10% off the March highs with a major technical break in the index now threatening a run on the yearly lows. These are the targets and invalidation levels that matter on the SPX500 technical price charts this week. Review my latest Strategy Webinar for an in-depth breakdown of this SPX500 setup and more.

S&P 500 Price Chart – SPX500 Daily

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Technical Outlook: In my last S&P 500 technical outlook we noted that the SPX500, “remains at risk for further losses near-term and we’re on the lookout for a possible low in the days ahead closer to trend support.” An outside-day reversal off slope resistance on April 21st was followed by a break below key Fibonacci support at 4309– The flood gates have opened.

S&P 500 Price Chart – SPX500 240min

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Notes: A closer look at SPX500 price action shows the index trading within the confines of a descending pitchfork formation extending off the March high with price rebounding today just points ahead of the median-line. Initial resistance now 4309/16 and the 4/21 outside reversal-day close at 4391- both levels of interest for possible topside exhaustion IF reached. Broader bearish invalidation now lowered to the 61.8% retracement / February opening-range low at 4446/50. Initial support now at the May 2021 low-day close / March low at 4117/37 exposes subsequent objective at the May low (4035) and the 100% extension of the decline off the yearly high at 3924- look for a larger reaction there IF reached.

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Bottom line: The technical damage has been done and S&P 500 remains at risk for further losses. From a trading standpoint, look for an exhaustion high ahead of 4391 on recoveries with a break lower likely to fuel another accelerated drop toward fresh yearly lows. Review my latest S&P 500 Weekly Technical Forecast for a closer look at the longer-term SPX 500 technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

S&P 500 Trader Sentiment – US500 Price Chart

A summary of IG Client Sentiment shows traders are net-long the S&P 500- the ratio stands at +1.64 (62.13% of traders are long) – typically a bearishreading
Long positions are2.54% higher than yesterday and 15.27% higher from last week
Short positions are 14.31% lower than yesterday and 13.66% lower from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests US 500 prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger SPX500-bearish contrarian trading bias from a sentiment standpoint.