The S&P 500 is higher today as it aims to recover some of yesterday’s losses. The steep drop in global crude prices and similar declines in Chinese exports and imports had severely dampened the S&P 500 and global stock markets; so much so that the circuit break went up to halt trading for a while.
Today’s market session has been less turbulent, and the CNN Fear and Greed index went up by a notch. Promised stimulus packages helped markets shake off negative sentiment, with the S&P 500 gaining 2% on the day. President Donald Trump’s promise of “major” moves to be announced on Tuesday has heightened speculations of broad-based stimulus packages, but this still does not make the coronavirus-related jitters go away.
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Technical Outlook for S&P 500
The S&P 500 has recovered a little ground in Tuesday’s trading but is still unable to break above the 23.6% Fibonacci price of 2853.9. The Fibonacci retracement is traced from the swing high of Feb 19, 2020 to the swing low of Mar 9, 2020 on the 4-hour chart.
A break above this level, which also coincides with the low of Feb 28, sends price first to the 2900 psychological support (lows of March 1 and 2), with the 2948.3 price level hanging overhead. This price level could become relevant if price aims for the 2955.8 price level (38.2% Fibonacci retracement level) during a recovery run.
On the flip side, the downside sentiment continues to linger and could kick in at any time. Indeed, the recovery may just be induced by profit-taking from sellers, who could be lurking around to snap up positions at bargain recovery prices. If this is the case, then downside targets at 2806.1 and 2726.9 could be on the line of fire if the price is rejected firmly at the 23.6% Fibonacci price level.
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