Stock market merchants have their eyes glued to certain key technical graphics to understand where the market then heads while the rout of shares becomes more and more intense compared to fears of commercial uncertainty and slows economic growth.
The S&P 500 index (^ SPX) briefly sank below the first traders of disturbing milestones looked at the start of the session – 5,504.65, the most recent Intraday low hit on March 13. But the reference of large actions quickly recovered this level and dropped from 1.2% to around 5,516 to 10:26 am in New York on Monday. The question is now whether it stays there.
“It was the bottom that launched the 5%rally, showing that there were buyers there,” said JC O’Hara, chief technician at Roth Capital Partners. “Many eyes will look to see if the Bulls can defend this line again.”
Merchants are looking for everything that can give them a market behavior index before the crucial deadline of April 2 when President Donald Trump’s administration should announce “reciprocal rates” on all countries. At the same time, several Wall Street strategists sounded the alarm on American actions on Monday, invoking risks to the growth of the lack of clarity on commercial policy.
“When the fundamental image is as blurred as it is currently – whether economic growth, geopolitics or income – techniques offer a clearer vision of behavior,” Mark Hackett, chief strategist in Nationwide, told. “Techniques are a temperature verification, measuring investor psychology, their behavioral models and demand for supply for actions.”
From a technical point of view, if the S&P 500 closes under its hollow on March 13, there is not much support “up to 5,400,” said O’hara. It is a 3.2% drop in Friday fence.
Technical strategists also recommend keeping an eye on the width of the market, looking for more evidence of washed conditions. A reading of 10% or less in the percentage of actions negotiated above their 20-day mobile average would be “a good sign of a capitulation,” said Adam Turnquest, chief technical strategist at LPL Financial.
The gauge for fear of the stock market – the VIX – Vix – volatility index – is also closely examined. It currently oscillates almost 24 years, a level which indicates that traders become anxious. And the market pros look to see if he approaches 30, which would indicate growing distress. Before the stock market stockings, the VIX must be re-tested the summit of 29.57 affected earlier this month, Jeff Jacobson, strategist of derivatives at 22V Research, wrote in a note to customers on Sunday that the VIX would need to at least test the highs affected earlier this month before the markets can lower.
