Dow Jones futures

S&P 500 Index Slides Retreats as Fear and Greed Index Drops to 58

The S&P 500 index is under intense pressure as investors continue focusing on the rising US Treasury yields. S&P futures are trading at $3,830, which is a 3% decline from its record high of $3,950. The Dow Jones and Nasdaq 100 futures are also down by 0.30% and 0.60% while the fear and greed index has dropped from 63 to 58.

S&P 500 news: The S&P index is falling mostly because of the rising US Treasuries. In the past few days, the 10-year yields have risen to the highest level since February last year. Other yields have also risen sharply recently. This performance is mostly because investors expect the upcoming stimulus package will overheat the economy and force the Fed to intervene. As a result, there is an ongoing rotation from risky assets to bonds.

US 10-year, 5-year and 30-year treasuries

Indeed, the sell-off is happening globally and across assets. In Asia, the Nikkei 225, Hang Seng, and Shanghai indices have all fallen by more than 2% today.

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Fear and greed index: Meanwhile, the fear and greed index, which is an important gauge of sentiment has started to drop. The index is at 58, which signals greed in the market. However, it is pointing towards the fear level. Indeed, the put and call options and market volatility are in the extreme fear zone.

S&P 500 technical outlook

The four-hour chart shows that the S&P 500 index reached an all-time high of $3,950 this week. Since then, it has moved relatively lower and is currently along the lower side of the ascending channel. The index is also below the 25-day and 15-day moving averages.

In my view, the index could attempt to rebound in the short term as bulls target the upper side of the channel that is slightly above $3,950. However, a drop below this support will invalidate this prediction. It will signal that there are still more sellers in the market who will target the next support at $3,695.

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S&P 500 chart

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