Stocks

The S&P 500 Level To Watch Is 2800 – Part 2

The sell-off in U.S. stocks may get uglier as President Donald Trump’s trade war escalates at a time when the market is far from cheap, RBC Capital Markets says.

A 10% correction of the S&P 500 Index from its April peak to 2,650 is becoming more likely, according to strategist Lori Calvasina. The equity gauge is about 4% above that level. Investors should take a more defensive stance, with the firm upgrading utility shares, while cutting its recommendation on commodity producers, she said in a note to clients Friday.

Should the index retreat to 2,650, that would erase half the gains from the market’s post-Christmas rally and mark the second time in less than a year that equities suffer a 10% correction.

Source

About two weeks ago, I talked about how the 2800 on the S&P 500 was a critical level and how the S&P 500 was showing weakness for the first time since December. The reason why the 2800 level is a very critical level because it served as previous support/resistance.

However, the chart suggests if the daily demand at 2800 was breached, price will head to the next zone at 2630.

The S&P 500 Level To Watch Is 2800

Since that time price has breached the 2800 level and now sits at 2750.

But when it breached the daily demand zone at 2800, it formed a daily supply zone, increase the probability of more downside to the 2630 level.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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