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Trends & Analysis
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Trends & Analysis
News

Nvidia’s stock surges past $1,000 on strong Q1

News

Will mighty Microsoft build on its 2024 gains?

News

USD gains amid Fed rate cut speculations

News

Is the silver squeeze back?

News

Li Auto’s stock hits a speedbump on Q1 results

News

Gold closes week higher on rate cut speculations

Asset Watch

A bullish breakout or a double top for the S&P 500?

Tuesday May 7, 2024

It’s been a wild few weeks for the S&P 500, as geopolitics and rising Treasury yields fostered fears of an economic slowdown. But with the FOMC announcing it will reduce its quantitative tightening (QT) program by $35 billion and several Big Tech juggernauts passing their earnings tests, sighs turned to celebrations as the S&P 500 clawed back a meaningful chunk of its recent losses.
However, with the pressure to perform poised to intensify in the days ahead, it could be a heavyweight fight to determine whether the bulls or bears regain control.
The May 3 surge helped the S&P 500 close above its late April highs, yet the index could not recoup its 50-day moving average. If it stalls here, the pattern could look a lot like a bear flag.

The recent price action also resembles the run-up to the correction that unfolded in late 2023. Back then, a sharp rally gave way to a breakdown below the 50-day MA, and after some consolidation, the area between the 50 and 100-day MAs kept narrowing until the S&P 500 sunk below both.
This time around, the price action on the right side of the chart shows how the 50 and 100-day MAs continue to converge, and the gap will shrink the longer the index remains below the 50-day MA. As a result, you should pay close attention to the 50-day MA and maintain a cautious outlook until the index showcases sustainable strength above the key level.
So, will the bulls prevail and recoup the 50-day MA, or could the bears reprise their roles from late 2023?


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