US Stock Averages plunge (S&P 500 forecast)

Intermediate
  • Stock averages suffered a further slide on Tuesday as markets continued to react to the US tariffs on steel and aluminum imports from Brazil and Argentina, but also now have raised concerns that the US-China trade war could extend long into 2020.
  • Comments from President Trump alongside U.S. Commerce Secretary Wilbur Ross indicated that the signing of the Phase One trade deal would likely be pushed into 2020, with Trump pointing to after the November 2020 Presidential elections!
  • This activity saw the US equity averages take the baton from the European stock indices, which had led markets lower on Monday.
  • US (and global) averages have sunk to multi-week lows in just two day from all-time highs in the case of the US indices (as US Treasuries and global Bonds have rallied with the trade concerns).
  • Markit (global) and ISM (US) Services PMI are in the data spotlight today.
  • Here we focus on the US broad benchmark average future, the S&P 500 E-mini.

S&P 500 day trade outlook: Better top, intermediate-term neutral shift, downside risks

A Tuesday plunge through multiple trend line supports and critically below 3090.75 (as we had flagged for), to produce an intermediate-term shift from bullish to neutral, to reinforce Monday’s plunge from a new record high at 3158.0 to close the latter November bull gap at 3116.5-14.5, to keep risks lower for Wednesday.

  • We see a downside bias for 3080/79 and 3069.5; break here aims for critical 3063.5, then 3050.0 and maybe 3037.5.
  • But above 3107.5 opens risk up to 3121/22 and maybe 3129/30.

Intermediate-term outlook

An early December plunge below 3090.75 set an intermediate-term range. 

Range breakout parameters: Range seen as 3063.5 to 3158.0.

  • Upside risks: Above 3158.0 sets an intermediate-term bull trend to aim for 3250.0 and 3337.75.
  • Downside risks: Below 3063.5 sees an intermediate-term bear trend to target 3023.5, 3000.0 and 2953.75.

4 Hour S&P 500 E-mini future Chart

S&P 500 4hr Chart 2019-12-04

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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