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  • The S&P 500 is trading nearly 2% lower on Monday.
  • Coronavirus fears step up the selling pressure in the indices.

Risk backdrop

Over the session, the risk environment has been negative as investors are worried about more lockdowns and closures due to the COVID-19 pandemic. Oil companies have also been hit hard off the back of reports of higher Libyan production output and the aforementioned economic risk. The passing of U.S. Supreme Court Justice Ruth Bader Ginsburg also led some analysts to think that the fiscal stimulus could take longer. 

Travel companies have also taken a dive in the S&P 500 as Delta Airlines is down over 8% and United Airlines are over 6% lower. Oil companies like Haliburton and Schlumberger are also struggling with the latter dropping 8% in early trade. 

S&P 500 daily chart

The S&P 500 has come up to an important support area at 3,233.25. The price did print below that level as it index hit a low of 3,229.10 but importantly there has not been a close below the zone. 

If there is a close below the zone over the next couple of sessions that could send a bearish message to the market. Beyond that, the next major zone is at the blue line just under the 3K level. 

The indicators are at an interesting point. The MACD histogram is in the red and the signal lines are testing the zero point. The Relative Strength Index is oversold and has made a lower low wave while the price has not made the same lower low as the indicator.

The index is still in an uptrend and if the market makes a real lower high lower low wave then investors could get more worried. At the moment this can still be characterised as a deep correction.

S&P 500 technical analysis

Additional levels