S&P 500, Nasdaq Technical Price Outlook: Near-term Trade Levels
- S&P 500 technical trade level update – Daily & Intraday Charts
- SPX500 plunges into downtrend support at fresh yearly lows- risk for steeper losses
- SPX Resistance 4270, 4309, 4391-4419(critical) – Support 4117, 4035, 3924 (key)
The S&P 500 is in free-fall on the heels of yesterday’s FOMC rated decision with the technical posture of the index warning of more losses in the days ahead. The decline is now testing downtrend support and IF broken could fuel another accelerated sell-off. 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
Technical Outlook: In my last S&P 500 technical outlook we warned that the, “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.” The index registered a high at 4308 before reversing sharply lower yesterday and the focus remains on a break of downtrend support here to fuel the next leg lower in price.
S&P 500 Price Chart – SPX500 240min
Notes: A closer look at SPX500 price action shows the index trading within the confines of a near-term ascending pitchfork formation extending off the April / May lows. A downside break of this formation puts the focus back on subsequent support objectives at the May low (4035) and the 100% extension of the yearly decline at 3924– look for a larger reaction there IF reached. Initial resistance now 4270 backed by 4309 with broader bearish invalidation now lowered to the April 21st outside reversal close / 61.8% Fibonacci retracement at 4391–4419.
Bottom line: The S&P 500 remains at risk for further losses on a break of downtrend support here. From a trading standpoint, rallies should be capped by 4309 IF price is heading lower on this stretch with a close below the median-line keeping the focus on 3924. Things could get pretty ugly here, watch the close and stay tuned! 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 +2.08 (67.54% of traders are long) – typically a bearishreading
- Long positions are17.17% higher than yesterday and 18.48% higher from last week
- Short positions are 19.65% lower than yesterday and 15.61% 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 US 500-bearish contrarian trading bias from a sentiment standpoint.
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-Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex