S&P 500 fell yesterday as the Coronavirus epidemic is continuously destroying the U.S. economy. In this case, can S&P 500 Bears dominate the market further? What the charts and technical indicators are saying? Read more to find further insights into today’s S&P 500 Technical Analysis.
April 2, 2020 | AtoZ Markets – S&P 500 Index fell after the President warned of a “painful” period ahead. Wall Street is passing a very hard time with the uncertainty of the U.S. economy as well as the global economy. In this scenario, the Dow DJIA, -4.44% on yesterday closed with 974 points, or 4.44%, to 20,944, the S&P 500 SPX, -4.41% down by 114 points, or 4.41%, to 2,470.50, the Nasdaq Composite COMP, -4.40% fell by 340 points, or 4.41%, down to 7,360.
White House medical advisors recently predicted that even people stay at home for quarantine, despite that 100,000 to 240,000 people could die from the Coronavirus. Investors spoke to Donald Trump after he stated that, “Americans are going to have difficult weeks ahead while fighting the COVID-19 even with strict social distancing”.
Will S&P 500 Bears Continue to Dominate?
SPX dropped yesterday with a Bearish gap and closed above $2450 area. S&P 500 is currently trading around $2470 area and trying to push higher. As per the current price action, the price is quite volatile and indecisive, which may sustain further in the coming days.
Image: S&P 500 4 Hour Chart
According to the 4-hour chart, SPX is currently residing near $2470 area after yesterday’s daily close. After a Bearish gap, it’s time to see that the price can fill up the gap or push down further. So, if the price sustains above $2450 with an intraday close, the Bulls may recover higher towards $2650 and fill up the gap. Alternatively, if SPX falls below $2450 with a 4-hour close, the Bearish pressure may continue towards $2200 area in the coming days.
Furthermore, the dynamic level of 20 EMA is residing above the current price, which may work as a strong resistance. In this case, if the price can break above the dynamic level, S&P 500 Bulls may sustain further in the process. Besides, the MACD lines are residing below 0.00 level and may have a Bearish cross over. Additionally, the Stochastic Oscillator lines are residing above the overbought level, which had a Bearish intersection recently. It indicates Bears may regain momentum after an impulsive bearish pressure in the days ahead.
Can SPX Recover higher in this COVID-19 crisis?
According to the Daily chart, the S&P 500 is currently trading at $2470 area while Bears are currently dominating the market. The price recently retested $2450 area and had a daily close above it. As per the current scenario, if the price can have a daily close above $2450 area, the Bulls may recover higher towards $2900 in the days ahead. Alternatively, a daily close below $2450 area may indicate further Bearish pressure towards $2200 again.
Image: S&P 500 Daily Chart
Along with the dynamic level of 20 EMA is residing above the current price, which may act as a strong resistance. Even so, a break above the dynamic level may bring the Bulls forward to regain momentum. Moreover, the RSI indicator line is rising upward by following the upward trend line. So, if the RSI line comes down and bounces from the trend line, certain Bullish pressure can be observed in the coming days.
To conclude, the U.S. economy is currently in an uncertain period because of the ongoing Coronavirus pandemic. Despite the recent Bearish trend of the S&P 500, Bulls may regain momentum in the coming days.