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Trends & Analysis
News

Brent crude falls below $80 on US-Iran peace deal

News

JPY gains versus USD on strong trade data

News

US dollar gains ahead of central bank meetings

News

Gold surges after US-Iran peace deal

News

Dow jumps 900+ points on Iran deal prospects

News

Oracle shares tank despite Q4 earnings beat

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Asset Watch

Which MA will rule the S&P 500?

Thursday, March 30, 2023

While seasonality remains in the bulls’ favour, concerns over a banking crisis have kept a lid on U.S. equities. Though Bank of America’s Chief Investment Strategist Michael Hartnett said the current “levels of pessimism [rival the] lows of [the] past 20 years,” he still recommends selling any rallies between 4,100 and 4,200.
However, with the technical backdrop signalling a major move in either direction, the S&P 500 will soon be forced to break out or break down.
The index is sandwiched between its 50 and 200-day moving averages, and the distance between them will narrow as time passes.
Furthermore, the candlesticks on the right side of the chart highlight the indecision. After the index broke above its 50-day MA intraday on Mar. 22, it was a mad dash for the exits, and the S&P 500 closed at the lows.
S&P 500 Stock Chart Trading View

However, when the index dipped below its 200-day MA intraday on Mar. 24/25, buyers quickly stepped in, and the S&P 500 closed above the key level.

So, while U.S. nonfarm payrolls are scheduled for release on Apr. 7 and often move the market, Q1 earnings season also begins on Apr. 14. Therefore, volatility should rise in the weeks ahead, and the S&P 500’s movement around the MAs will provide important clues about its medium-term direction.

In the meantime, should you remain bullish above the 200-day MA (3,931.54) and turn bearish if it breaks?


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