S&P 500 eyeing critical support
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: The benchmark US S&P 500 index is moving toward critical support levels as the escalating Sino-US trade war pulls valuations lower and boosts global risk-off sentiment.
If buyers fail to close today’s opening gap, downward pressure remains intact. A close below the 2.798,77 support area is likely to trigger a further sell-off down to around 2,730. If we see a downward move to that level, a trend is confirmed.
In case of a bounce from support levels, it is our view that a sideways market should be expected and not a push for a new all-time high.
The past week's candles were characterised by fairly long shadows meaning intraday highs and lows far from the open/close prices. This indicates a nervous market. It also means that if support levels are not broken, the market is more likely to take a wait-and-see approach, i.e. trading sideways in a range between 2,800 and 2,900.
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