S&P500: Should cross the 1D MA200 to avoid a new Low.

Despite this week's rebound on Friday's 2,855 low (a level which was the 1W Support also made by the October 3rd 2019 low), S&P failed to break the 1D MA200 so far with the 1D chart remaining under pressure (RSI = 38.384, MACD = -75.790, ADX = 49.730). That is despite the fact that the Federal Reserve announced a rate cut yesterday, with the index pulling back within the 0.5 - 0.618 Fibonacci zone.

The current price action is similar so far to the late 2018 sell-off. The price failed to cross the 1D MA200 on three occasions and a Death Cross (MA50 crossing below the MA200) was formed that led to the December 2018 low.

It becomes obvious that SPX should break above the 1D MA200 in order to avoid a similar death spiral as investors will surely lose confidence that even traditional saving mechanisms like rate cuts are unable to provide relief on the stock market.




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코멘트:

Correction: The time frame is 4H, so meant to type 4H MA200 not 1D.