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030619WallstreetM

Just how low will the S&P500 go?

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  As equities sell off globally, Saxo technical analyst Kim Cramer Larsson gives us a quick overview of the S&P500, pointing out key support and retracement levels.

The S&P500 index closed below crucial support at 2,798.77 last week. The next support is around 2,730. That level could prove to be even more crucial since a close below it would open the way for a deeper downturn as there isn't  any other real support before around the 2,570–2,578 area. The 2,570 level is around where there was strong support back in February/May 2018 and where the uptrend was confirmed on the weekly chart last January. Meanwhile, 2,578 is the 0.618 retracement of the bull move this year. 
 
However, I believe we will see a short-term exhaustion in the sell-off followed by a minor rebound. A short-term low should be in place today or tomorrow, Thursday, June 4. A rebound back to or maybe a bit above the 200-day simple moving average is not unlikely. But he trend would still be down and will remain bearish as long as the Index stays below 2,900. There is no divergence on the RSI, indicating we could see lower levels before a rebound. 

Both charts are the S&P500 daily. The lower one is just zoomed out.
030619 SP 500 chart 1
Source: Saxo Bank
030619 SP 500 chart 2
Source: Saxo Bank

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