Stocks plunge, remain vulnerable despite bounces

Intermediate
  • An extremely aggressive selloff by global stock averages to start the week, reacting to the lockdown in Italy, the state of emergency on New York and the oil price war.
  • This saw the major global share indices gap lower on Sunday night/ Monday morning, with circuit breakers kicking in on the S&P 00 future and the New York stock Exchange.
  • Markets have wiped out longer term supports going back to early 2019/ late 2018, which leave a more vulnerable theme deeper into March.
  • A rebound overnight on stimulus hopes from the US.
  • Here we focus on future on the US benchmark equity index, the S&P 500.

S&P 500 E-mini future day trade outlook: Downside risks intensifying, despite bounce

A Monday plunge through numerous supports including a key 2728.75 level, down to 2695.25, to reinforce the short- and intermediate-term bear trends and despite a rebound overnight, whilst below 2916.0 to keep risks lower into Tuesday.

·       We see a downside bias for 2797.75 and 2767.0; a break below aims for 2728.0 and 2695.25, maybe even 2612.5.

·       But above 2916.0 targets 2963/65, which we would look to try to cap; above opens risk up towards 2984.25 and even 3000.0 and 3037.0.

 

S&P 500 E-mini future intermediate-term outlook

The latter February plunge below 3303.5 signalled an intermediate-term bearish shift.

·       Downside risks: We see an intermediate-term bear trend to aim for 2560.5, 2500, maybe 2438.5.

·       What Changes This? Above 3137.0 sees an intermediate-term neutral range and above 3260.0 a bull trend.

Daily S&P 500 E-mini future Chart

S&P 500 chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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