Fears that soaring coronavirus numbers in the US could provoke a new round of lockdowns which could hammer the US economy is driving the S&P 500 lower at the New York market open. Upbeat Chinese GDP data, as well as retail sales figures which beat estimates but not the previous numbers, were not enough to overcome the coronavirus-induced market fears.
US Retail Sales and Core Retail Sales came in at 7.5% and 7.3%, which were less than the previous figures of 18.2% (revised upwards) and 12.1% (revised lower) respectively, even though they beat estimates of 5.0% each. This has sparked fears that the retail market in the US has started to slow down once more as lockdowns in California and other areas begin to kick in.
The S&P 500 opened 0.56% lower for the trading session at 3208.36 and now trades at 3209.4 after a slight recovery.
Technical Outlook for S&P 500 Index
The S&P 500 index continues to find itself unable to breach the critical 3228.4 resistance; a move which is necessary to re-establish the higher highs that signify a continuation of the recovery of the index from its March lows.
Yesterday’s slight upside gap on the back of a piercing pattern also could not breach that resistance area, and with the current market fundamentals favouring the bears at this time, we could see a pullback towards 3137.0. A breakdown of this area targets 3070.8, with the support zone found between 3028.3 and 2961.4 remaining intact. Only a failure of this support zone will open the door for a full-scale selloff which targets 2844.3, 2793.4 (50% Fibonacci retracement from the 18 February swing high to the 23 March swing low).
On the flip side, a move towards 3335.5 can only be established if the breakout above 3228.4 is confirmed, either by two successive daily closing penetration candles or by a single candle with a 3% penetration on the weekly chart.
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S&P 500 Daily Chart
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