- A further plunge in global equity markets this week as we highlighted on Tuesday with our article on the DAX here.
- After Monday’s plunge and then a bounce Tuesday, the “risk off” theme has fully resumed through midweek.
- This is being driven by a combination of:
- Surging European and UK COVID-19 cases
- New lockdown/ restriction measures in the UK and throughout Europe
- Economic data turning more negative, most recently Wednesday’s global Market Flash Purchasing Managers Index (PMI) data
- US election concerns starting to increase with growing tensions and indecision
- Tech stocks still correcting from overbought and possibly over valued
- Below we look at the technical analysis view for the US benchmark average, the S&P 500, which is setting up for a far more negative signal.
S&P 500 future day trade outlook: Downside threats resume for bigger bear shift below key 3190.25/88.5
Day trade update and view
A rebound Tuesday-Wednesday above resistances at 3289.5 and 3306.0/09.5, but capped by 3326.26 (at 3319.75) to then revert lower and push below Monday’s low and further support at 3217.25/12.5, to resume negative forces from Monday’s plunge that wiped out numerous supports (at 3280.75/78.75, 3254.75 and 3234/33), plus from the earlier September sell-off, to keep the threat lower for Thursday.
Day trade setup
- We see a downside bias through 3210.0 for key 3190.25/88.5; a break here aims for the 3217.25/12.5 swing lows and maybe key 3190.25/88.5.
- But above 3240.0opens risk up to 3287.25 and possibly even the 3319.75/26.25 area.
S&P 500 future intermediate-term outlook
The early September sell-off below 3319.5 signalled an intermediate-term shift to a broader range seen as 3190.25/88.5 to 3484.25.
Downside risks: Below 3190.25/88.5 sets an intermediate-term bear trend to target 3105.25, 3000.0, 2983.5 and 2923.75.
Upside risks: Above 3484.25 sets an intermediate-term bull trend to target 3587.0, the 3626/30 extension target area and 3709.75.