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  • The S&P 500 is down a massive 5.35% on Thursday as risk-aversion kicks in.
  • The price is now testing the daily 200 period Simple Moving Average (SMA).

S&P 500 daily chart

The S&P 500 is new breaking through the 200 daily SMA. This moving average is normally seen as one of the most important and carries lots of attention.

This move lower could be the beginning of a deeper correction but it’s important to remember the market is still in an uptrend. Market participants have flocked to safe-haven assets today as yields in the fixed income markets have fallen but the FX markets might have caught the move early with the CHF and JPY outperforming all week.

The next support is at the wave high of 2,974 but the market is close to the psychological 3,000 level. For signs of a technical trend change a lower high lower low pattern needs to be created and this could just be wave 1 of that pattern.

The technical indicators are obviously also looking bearish. The Relative Strength Index indicator has pulled away from overbought areas. The MACD signal lines also looks like they will crossover soon but the histogram is still green.

Risk off as S&P drops

Additional levels

 

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