S&P 500 technical analysis: Bears take control as Trump tariffs weigh on market sentiment
S&P 500 dips below 5500 as trade tensions spark growth concerns. Technicals indicate further downside, with key support levels in focus amid rising market volatility
S&P 500 (US 500)
A short term rebound off the 5000 level has now petered out at the 5670 level which is acting as near term resistance. The SP500 (US 500) has now started to extend losses post Trump’s latest reciprocal tariff announcement which threatens global growth and increases the probability of a recessionary environment.
The index price has now closed below the 5500 level suggesting that the downtrend is now extending. 5385 becomes the initial downside support target from the move. A close below this level would suggest the 5160 level as a further support target. Traders who are short might consider having a stop loss on a close above the 5590 level.
S&P 500 (previous)
Circled blue we see the bearish price reversal that we were looking for in our previous note did confirm. The overbought signal and bearish volume pattern, in conjunction with the price reversal did well in predicting further downside for the SP500 index, with the initial support target of 5500 now well within sight.
Traders who have been short into the move might now consider locking in profits as we move into oversold territory near support and assess how the price handles the 5500 level.
A downside break of the 5500 level, confirmed with a close, would highlight that we are now making lower lows in conjunction with lower highs i.e. the building blocks of a new downtrend. The next support target below 5500 is considered at 5385. Because of the close proximity of this support level, traders might prefer to see this level broken before confirming this new downtrend. In this scenario a short bias to trades on the index may be preferred going forward.
We will update guidance accordingly should a new trade opportunity present itself. For now we wait and consider how the price approaches the aforementioned key levels.
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