It was a very heavy day on Monday and US stock indices sank deeply, losing 3% intraday. They managed to erase some of the losses in the final hour of trading but closed 2% lower on the day. The SP500 index was seen flattish during the Tuesday morning and was hovering around 2,584 USD.
The US calendar is rather empty today and investors will therefore focus mainly on sentiment, which appears bearish. The SP 500 index closed below the 200 day moving average for the first time since the Brexit referendum. This could be a stronger bearish signal and might add momentum to the current bearish trend.
However, the Brexit breakdown below the 200 DMA was only a bearish trap and stocks surged afterward and therefore this could repeat in the near days as well.
The first resistance for today’s trading is at the mentioned 200 day moving average, which is around 2,595 USD. Previous lows are also located here. If the price breaches above, the short-term outlook could switch to bullish, targeting 2,623 USD in the first wave.
On the other hand, the support is at yesterday’s lows at 2,560 USD and if broken, further depreciation toward February lows of 2,530 USD could occur. In all cases we strongly recommend to have rigorous money and risk management.
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