Key Technical Indicators Signal Downside Potential for S&P 500
The market has recently exhibited a series of bearish indications, suggesting potential further downside for the SPX:
Price Action: The market gapped down after September 20th and hasn't recovered those levels.
Short-Term Moving Averages: The 50-day moving average recently crossed below the 21-day, indicating a potential short-term downtrend. Moreover, the price struggled to move back above the 50-day level.
Diverging Moving Averages: While the 21 and 50-day averages tilt downward, the longer 150 and 200-day averages remain bullish, suggesting a potential trend shift.
Critical Level Breach: The SPX closed below its 200-day SMA, a traditionally bearish signal.
Key Bearish Indicators:
TRIN: Indicates more volume with declining stocks.
TICK: Levels between -1000 to -1300 signal a bearish sentiment, hinting at institutional selling.
VIX: A 66% rise in the past week reflects increasing market uncertainty.
Prediction: Given these indicators, it seems probable that the SPX might not rebound off its 200-day SMA in the short term. There's potential for it to breach significant support levels, including S2 and the 1 Year anchored VWAP.
Price Action: The market gapped down after September 20th and hasn't recovered those levels.
Short-Term Moving Averages: The 50-day moving average recently crossed below the 21-day, indicating a potential short-term downtrend. Moreover, the price struggled to move back above the 50-day level.
Diverging Moving Averages: While the 21 and 50-day averages tilt downward, the longer 150 and 200-day averages remain bullish, suggesting a potential trend shift.
Critical Level Breach: The SPX closed below its 200-day SMA, a traditionally bearish signal.
Key Bearish Indicators:
TRIN: Indicates more volume with declining stocks.
TICK: Levels between -1000 to -1300 signal a bearish sentiment, hinting at institutional selling.
VIX: A 66% rise in the past week reflects increasing market uncertainty.
Prediction: Given these indicators, it seems probable that the SPX might not rebound off its 200-day SMA in the short term. There's potential for it to breach significant support levels, including S2 and the 1 Year anchored VWAP.