Oil plunge pulls stocks lower – Oil and S&P 500 forecast

Intermediate
  • A switch to a “risk off” theme to start the week with stock averages dipping lower, pulled down by the aggressive plunge in the Oil futures market.
  • The front month Light Crude Oil future plunged below $0, down to -$40 (yes, negative), driven by technical market implications, with traders not wanting to take delivery of physical oil.
  • This oil panic saw equity markets pulled lower too, with the negative theme reinforced overnight by rumours of serious health issues for North Korean leader, Kim Jong Un.
  • Here we look at the implications for the US benchmark future, the S&P 500.

S&P 500 future day trade outlook: Dip, rebound and dip, but risks just stay higher

A Monday setback through 2821.0 support from Friday but to then stage a firm rebound from just above our 2806/05 support zone (from 2808.0), but then another selloff down to 2772.25, but whilst just holding here we still just see upside pressures from Friday’s new recovery high at 2885.0 (just above our key 2884.75 level to shift the intermediate-term outlook from bearish to neutral), to keep risks higher into Tuesday.

  • We see an upside bias for 2833.25 and 2860.75; a break above aims for 2885.0 and maybe towards 2916.0.
  • But below 2772.5 targets 2746.0, which we would look to try to hold; through here aims for 2726/25 and maybe 2701.0/2698.5 supports.

S&P 500 future intermediate-term outlook

The mid-April push above 2884.75 signalled an intermediate-term shift from bearish to neutral, with a range seen as 3137.0 to 2424.75.

  • Downside risks: Below 2424.75 sets an intermediate-term bear trend to aim for 2174.0, 2000.0 maybe 1802.5.
  • Upside risks: Above 3137.0 sets an intermediate-term bull trend to aim for 3397.5 maybe 3500.0.

4 Hour S&P 500 future Chart

S&P 500

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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